November 30, 2014
CHAPTER 1: Preliminary
Section 1: Short title, extent and commencement.
- (1) This Act may be called the Income-tax Act, 1961.
(2) It extends to the whole of India.
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962Bottom of FormTop of Form
Section 2: Definitions.
- In this Act, unless the context otherwise requires,—
[(1) “advance tax” means the advance tax payable in accordance with the provisions of Chapter XVII-C;]
[ (1A)] “agricultural income”7 means8—
9[(a) any rent10 or revenue10 derived10 from land10 which is situated in India and is used for agricultural purposes;]
(b) any income derived from such land10 by—
(i) agriculture10; or
(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market10; or
(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub-clause ;
(c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on :
9[Provided that—
(i) the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a store-house, or other out-building, and
(ii) the land is either assessed to land revenue in India or is subject to a local rate assessed and collected by officers of the Government as such or where the land is not so assessed to land revenue or subject to a local rate, it is not situated—
(A) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board and which has a population of not less than ten thousand 11[***]; or
11a[(B) in any area within the distance, measured aerially,—
(I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (A) and which has a population of more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (A) and which has a population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (A) and which has a population of more than ten lakh.12
13[14[Explanation 1.]—For the removal of doubts, it is hereby declared that revenue derived from land shall not include and shall be deemed never to have included any income arising from the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of this section.]
15[Explanation 2.—For the removal of doubts, it is hereby declared that income derived from any building or land referred to in sub-clause (c) arising from the use of such building or land for any purpose (including letting for residential purpose or for the purpose of any business or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not be agricultural income.]
16[Explanation 3.—For the purposes of this clause, any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income;]
17[Explanation 4.—For the purposes of clause (ii) of the proviso to sub-clause (c), “population” means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;]
18[19[(1B)] “amalgamation”, in relation to companies, means the merger of one or more companies with another company or the merger of two or more companies to form one company (the company or companies which so merge being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that—
(i) all the property of the amalgamating company or companies immediately before the amalgamation becomes the property of the amalgamated company by virtue of the amalgamation ;
(ii) all the liabilities of the amalgamating company or companies immediately before the amalgamation become the liabilities of the amalgamated company by virtue of the amalgamation ;
(iii) shareholders holding not less than 20[three-fourths] in value of the shares in the amalgamating company or companies (other than shares already held therein immediately before the amalga-mation by, or by a nominee for, the amalgamated company or its subsidiary) become shareholders of the amalgamated company by virtue of the amalgamation,
otherwise than as a result of the acquisition of the property of one company by another company pursuant to the purchase of such property by the other company or as a result of the distribution of such property to the other company after the winding up of the first-mentioned company ;]
21[(1C) “Additional Commissioner” means a person appointed to be an Additional Commissioner of Income-tax under sub-section (1) of section 117 ;
(1D) “Additional Director” means a person appointed to be an Additional Director of Income-tax under sub-section (1) of section 117 ;]
(2) “annual value”, in relation to any property, means its annual value as determined under section 23 ;
(3) 22[* * *]
(4) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 ;
(5) “approved gratuity fund” means a gratuity fund which has been and continues to be approved by the 23[23a[Principal Chief Commissioner or] Chief Commissioner or 23a[Principal Commissioner or] Commissioner] in accordance with the rules contained in Part C of the Fourth Schedule ;
(6) “approved superannuation fund” means a superannuation fund or any part of a superannuation fund which has been and continues to be approved by the 23[23a[Principal Chief Commissioner or] Chief Commissioner or 23a[Principal Commissioner or] Commissioner] in accordance with the rules contained in Part B of the Fourth Schedule ;
24(7) “assessee”25 means a person by whom 26[any tax] or any other sum of money is payable under this Act, and includes—
(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income 27[or assessment of fringe benefits] or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ;
(b) every person who is deemed to be an assessee under any provision of this Act ;
(c) every person who is deemed to be an assessee in default under any provision of this Act ;
28[(7A) “Assessing Officer” means the Assistant Commissioner 29[or Deputy Commissioner] 30[or Assistant Director] 29[or Deputy Director] or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the 31[Additional Commissioner or] 32[Additional Director or] 33[Joint Commissioner or Joint Director] who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act ;]
(8) “assessment”34 includes reassessment ;
(9) “assessment year” means the period of twelve months commencing on the 1st day of April every year ;
35[(9A) “Assistant Commissioner” means a person appointed to be an Assistant Commissioner of Income-tax 36[or a Deputy Commissioner of Income-tax] under sub-section (1) of section 117 ;]
37[(9B) “Assistant Director” means a person appointed to be an Assistant Director of Income-tax under sub-section (1) of section 117;]
(10) “average rate of income-tax” means the rate arrived at by dividing the amount of income-tax calculated on the total income, by such total income ;
38[(11) “block of assets” means a group of assets falling within a class of assets comprising—
(a) tangible assets, being buildings, machinery, plant or furniture;
(b) intangible assets, being know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature,
in respect of which the same percentage of depreciation is prescribed ;]
(12) “Board” means the 39[Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)] ;
40[(12A) “books or books of account” includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device;]
41(13) “business”42 includes any trade42, commerce or manufacture or any adventure42 or concern in the nature of trade42, commerce or manufacture ;
42a[(13A) “business trust” means a trust registered as an Infrastructure Investment Trust or a Real Estate Investment Trust, the units of which are required to be listed on a recognised stock exchange, in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and notified by the Central Government in this behalf;]
43(14) 43a[“capital asset” means property44 of any kind held by an assessee, whether or not connected with his business or profession, but does not include—
(i) any stock-in-trade], consumable stores or raw materials held for the purposes of his business or profession ;
45[(ii) personal effects46, that is to say, movable property (including wearing apparel and furniture) held for personal use46 by the assessee or any member of his family dependent on him, but excludes—
(a) jewellery;
(b) archaeological collections;
(c) drawings;
(d) paintings;
(e) sculptures; or
(f) any work of art.
46a[Explanation.]—For the purposes of this sub-clause, “jewellery” includes—
(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel;
(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel;]
The following Explanation 2 shall be inserted after the renumbered Explanation 1 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Explanation 2.—For the purposes of this clause—
(a) the expression “Foreign Institutional Investor” shall have the meaning assigned to it in clause (a) of the Explanation to section 115AD;
(b) the expression “securities” shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956)46b;
47[(iii) agricultural land48 in India, not being land situate—
(a) in any area which is comprised within the jurisdiction of a municipality48 (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population48a of not less than ten thousand 49[***] ; or
50[(b) in any area within the distance, measured aerially,—
(I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh.
- —For the purposes of this sub-clause, “population” means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year51;]]
52[(iv) 6 per cent Gold Bonds, 1977,53[or 7 per cent Gold Bonds, 1980,] 54[or National Defence Gold Bonds, 1980,] issued by the Central Government ;]
55[(v) Special Bearer Bonds, 1991, issued by the Central Government ;]
56[(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government.]
57[Explanation.—For the removal of doubts, it is hereby clarified that “property” includes and shall be deemed to have always included any rights in or in relation to an Indian company, including rights of management or control or any other rights whatsoever;]
58[59(15) 60“charitable purpose”61 includes relief of the poor, education61, medical relief, 62[preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,] and the advancement of any other 61object of general public utility:
Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business61, or any activity of rendering any service in relation to any trade, commerce or business61, for a cess or fee or any other consideration, irrespective of the nature of use or appli-cation, or retention, of the income from such activity:]
63[Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is 64[twenty-five lakh rupees] or less in the previous year;]
65[(15A) “Chief Commissioner” means a person appointed to be a Chief Commissioner of Income-tax or a Principal Chief Commissioner of Income-tax under sub-section (1) of section 117;]
66[67[(15B)] “child”, in relation to an individual, includes a step-child and an adopted child of that individual ;]
68-70[(16) “Commissioner” means a person appointed to be a Commissioner of Income-tax or a Director of Income-tax or a Principal Commissioner of Income-tax or a Principal Director of Income-tax under sub-section (1) of section 117;]
71[(16A) “Commissioner (Appeals)” means a person appointed to be a Commis-sioner of Income-tax (Appeals) under sub-section (1) of section 117 ;]
72[(17) “company” means—
(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of a country outside India, or
(iii) any institution, association or body which is or was assessable or was assessed as a company for any assessment year under the Indian Income-tax Act, 1922 (11 of 1922), or which is or was assessable or was assessed under this Act as a company for any assessment year commencing on or before the 1st day of April, 1970, or
(iv) any institution, association or body, whether incorporated or not and whether Indian or non-Indian, which is declared by general or special order of the Board to be a company :
Provided that such institution, association or body shall be deemed to be a company only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration ;]
(18) “company in which the public are substantially interested”—a company is said to be a company in which the public73 are substantially interested—
74[(a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a corporation owned by that bank ; or]
75[(aa) if it is a company which is registered under section 25 of the Companies Act, 1956 (1 of 1956)76 ; or
(ab) if it is a company having no share capital and if, having regard to its objects, the nature and composition of its membership and other relevant considerations, it is declared by order of the Board to be a company in which the public are sub-stantially interested :
Provided that such company shall be deemed to be a company in which the public are substantially interested only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration ; or]
77[(ac) if it is a mutual benefit finance company, that is to say, a company which carries on, as its principal business, the business of acceptance of deposits from its members and which is declared by the Central Government under section 620A78 of the Com-panies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society ; or]
79[(ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by, one or more co-operative societies ;]
80[(b) if it is a company which is not a 81private company as defined in the Companies Act, 1956 (1 of 1956), and the conditions specified either in item (A) or in item (B) are fulfilled, namely :—
(A) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) were, as on the last day of the relevant previous year, listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder ;
82[(B) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted uncondi- tionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by—
(a) the Government, or
(b) a corporation established by a Central, State or Provincial Act, or
(c) any company to which this clause applies or any subsidiary company of such company 83[if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year.]
- —In its application to an Indian company whose business consists mainly in the construction of ships or in the manufacture or processing of goods or in mining or in the generation or distribution of electricity or any other form of power, item (B) shall have effect as if for the words “not less than fifty per cent”, the words “not less than forty per cent” had been substituted ;]]
(19) “co-operative society” means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies ;
84[(19A) “Deputy Commissioner” means a person appointed to be a Deputy Commissioner of Income-tax 85[* * *] under sub-section (1) of section 117 ;
86[(19AA) “demerger”, in relation to companies, means the transfer, pursuant to a scheme of arrangement under sections 391 to 39487 of the Companies Act, 1956 (1 of 1956), by a demerged company of its one or more undertakings to any resulting company in such a manner that—
(i) all the property of the undertaking, being transferred by the demerged company, immediately before the demerger, becomes the property of the resulting company by virtue of the demerger;
(ii) all the liabilities relatable to the undertaking, being transferred by the demerged company, immediately before the demerger, become the liabilities of the resulting company by virtue of the demerger;
(iii) the property and the liabilities of the undertaking or undertakings being transferred by the demerged company are transferred at values appearing in its books of account immediately before the demerger;
(iv) the resulting company issues, in consideration of the demerger, its shares to the shareholders of the demerged company on a proportionate basis 88[except where the resulting company itself is a shareholder of the demerged company];
(v) the shareholders holding not less than three-fourths in value of the shares in the demerged company (other than shares already held therein immediately before the demerger, or by a nominee for, the resulting company or, its subsidiary) become share-holders of the resulting company or companies by virtue of the demerger,
otherwise than as a result of the acquisition of the property or assets of the demerged company or any undertaking thereof by the resulting company;
(vi) the transfer of the undertaking is on a going concern basis;
(vii) the demerger is in accordance with the conditions, if any, notified under sub-section (5) of section 72A by the Central Government in this behalf.
Explanation 1.—For the purposes of this clause, “undertaking” shall include any part of an undertaking, or a unit or division of an undertaking or a business activity taken as a whole, but does not include individual assets or liabilities or any combination thereof not constituting a business activity.
Explanation 2.—For the purposes of this clause, the liabilities referred to in sub-clause (ii), shall include—
(a) the liabilities which arise out of the activities or operations of the undertaking;
(b) the specific loans or borrowings (including debentures) raised, incurred and utilised solely for the activities or operations of the undertaking; and
(c) in cases, other than those referred to in clause (a) or clause (b), so much of the amounts of general or multipurpose borrowings, if any, of the demerged company as stand in the same proportion which the value of the assets transferred in a demerger bears to the total value of the assets of such demerged company immediately before the demerger.
Explanation 3.—For determining the value of the property referred to in sub-clause (iii), any change in the value of assets consequent to their revaluation shall be ignored.
Explanation 4.—For the purposes of this clause, the splitting up or the reconstruction of any authority or a body constituted or established under a Central, State or Provincial Act, or a local authority or a public sector company, into separate authorities or bodies or local authorities or companies, as the case may be, shall be deemed to be a demerger if such split up or reconstruction fulfils 89[such conditions as may be notified in the Official Gazette90, by the Central Government];
(19AAA) “demerged company” means the company whose undertaking is transferred, pursuant to a demerger, to a resulting company;]
(19B) “Deputy Commissioner (Appeals)” means a person appointed to be a Deputy Commissioner of Income-tax (Appeals) 91[or an Additional Commissioner of Income-tax (Appeals)] under sub-section (1) of section 117 ;]
92[(19C) “Deputy Director” means a person appointed to be a Deputy Director of Income-tax 93[* * *] under sub-section (1) of section 117 ;]
(20) 94“director”, “manager” and “managing agent”, in relation to a company, have the meanings respectively assigned to them in the Companies Act, 1956 (1 of 1956) ;
95-98[(21) “Director General or Director” means a person appointed to be a Director General of Income-tax or a Principal Director General of Income-tax or, as the case may be, a Director of Income-tax or a Principal Director of Income-tax, under sub-section (1) of section 117, and includes a person appointed under that sub-section to be an Additional Director of Income-tax or a Joint Director of Income-tax or an Assistant Director or Deputy Director of Income-tax;]
(22) 99“dividend”1 includes—
(a) any distribution1 by a company of accumulated profits1, whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company ;
(b) any distribution1 to its shareholders by a company of debentures, debenture-stock, or deposit certificates in any form, whether with or without interest, and any distribution to its preference shareholders of shares by way of bonus, to the extent to which the company possesses accumulated profits1, whether capitalised or not ;
(c) any distribution1 made to the shareholders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not ;
(d) any distribution2 to its shareholders by a company on the reduction of its capital, to the extent to which the company possesses accumulated profits2 which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not ;
(e) any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) 3[made after the 31st day of May, 1987, by way of advance4 or loan to a shareholder4, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits5 ;
but “dividend” does not include—
(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration, where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets ;
6[(ia) a distribution made in accordance with sub-clause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allotted to its equity shareholders after the 31st day of March, 1964, 7[and before the 1st day of April, 1965] ;]
(ii) any advance or loan made to a shareholder 8[or the said concern] by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company ;
(iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so set off;
9[(iv) any payment made by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 77A10 of the Companies Act, 1956 (1 of 1956);
(v) any distribution of shares pursuant to a demerger by the resulting company to the shareholders of the demerged company (whether or not there is a reduction of capital in the demerged company).]
Explanation 1.—The expression “accumulated profits”, wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948, and before the 1st day of April, 1956.
Explanation 2.—The expression “accumulated profits” in sub-clauses (a), (b), (d) and (e), shall include all profits of the company up to the date of distribution or payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the date of liquidation, 11[but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law for the time being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition took place].
12[Explanation 3.—For the purposes of this clause,—
(a) “concern” means a Hindu undivided family, or a firm or an association of persons or a body of individuals or a company ;
(b) a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the previous year, beneficially entitled to not less than twenty per cent of the income of such concern ;]
13[(22A) “domestic company” means an Indian company, or any other com-pany which, in respect of its income liable to tax under this Act, 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 ;]
14[(22AA) “document” includes an electronic record as defined in clause (t)15 of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000);]
16[(22AAA) “electoral trust” means a trust so approved by the Board in accordance with the scheme17 made in this regard by the Central Government;]
18[19[(22B)] “fair market value”, in relation to a capital asset, means—
(i) the price that the capital asset would ordinarily fetch on sale in the open market on the relevant date ; and
(ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may be determined in accordance with the rules made under this Act ;]
20[(23) (i) “firm” shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of 1932)21, and shall include a limited liability partnership22 as defined in the Limited Liability Partnership Act, 2008 (6 of 2009);
(ii) “partner” shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of 1932), and shall include,—
(a) any person who, being a minor, has been admitted to the benefits of partnership; and
(b) a partner of a limited liability partnership22 as defined in the Limited Liability Partnership Act, 2008 (6 of 2009);
(iii) “partnership” shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of 1932), and shall include a limited liability partnership22 as defined in the Limited Liability Partnership Act, 2008 (6 of 2009);]
23[(23A) “foreign company” means a company which is not a domestic company ;]
24[(23B) “fringe benefits” means any fringe benefits referred to in section 115WB;]
25(24) “income”26 includes26—
(i) profits and gains26 ;
(ii) dividend ;
27[(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes 28[or by an association or institution referred to in clause (21) or clause (23)29, or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) 30[or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10 31[or by an electoral trust]].
- —For the purposes of this sub-clause, “trust” includes any other legal obligation ;]
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17 ;
32[(iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit ;
(iiib) any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living ;]
(iv) the value of any benefit or perquisite33, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid ;
34[(iva) the value of any benefit or perquisite35, whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1) of section 160 or by any person on whose behalf or for whose benefit any income is receivable by the representative assessee (such person being hereafter in this sub-clause referred to as the “beneficiary”) and any sum paid by the representative assessee in respect of any obligation which, but for such payment, would have been payable by the beneficiary ;]
(v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or section 59 ;
36[(va) any sum chargeable to income-tax under clause (iiia) of section 28 ;]
37[(vb) any sum chargeable to income-tax under clause (iiib) of section 28 ;]
38[(vc) any sum chargeable to income-tax under clause (iiic) of section 28 ;]
39[(vd)] the value of any benefit or perquisite taxable under clause (iv) of section 28 ;
40[(ve) any sum chargeable to income-tax under clause (v) of section 28 ;]
(vi) any capital gains chargeable under section 45 ;
(vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the First Schedule ;
41[(viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members;]
(viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964;]
42[(ix) any winnings from lotteries43, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.]
44[Explanation.—For the purposes of this sub-clause,—
(i) “lottery” includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called;
(ii) “card game and other game of any sort” includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game ;]
45[(x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees ;]
46[(xi) any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
Explanation.—For the purposes of this clause*, the expression “Keyman insurance policy” shall have the meaning assigned to it in the Explanation to clause (10D) of section 10 ;]
47[(xii) any sum referred to in 48[clause (va)] of section 28;]
49[(xiii) any sum referred to in clause (v) of sub-section (2) of section 56;]
50[(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56;]
51[(xv) any sum of money or value of property referred to in clause (vii) 52[or clause (viia)] of sub-section (2) of section 56;]
53[(xvi) any consideration received for issue of shares as exceeds the fair market value of the shares referred to in clause (viib) of sub-section (2) of section 56;]
The following sub-clause (xvii) shall be inserted after sub-clause (xvi) of clause (24) of section 2 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(xvii) any sum of money referred to in clause (ix) of sub-section (2) of section 56;
(25) “Income-tax Officer” means a person appointed to be an Income-tax Officer under 54[* * *] section 117 ;
55[(25A) “India” means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), and the air space above its territory and territorial waters;]
(26) “Indian company” means a company formed and registered under the Companies Act, 195655a (1 of 1956), and includes—
(i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir 56[and the Union territories specified in sub-clause (iii) of this clause]) ;
57[(ia) a corporation established by or under a Central, State or Provincial Act ;
(ib) any institution, association or body which is declared by the Board to be a company under clause (17) ;]
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any law for the time being in force in that State ;
58[(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa†, Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory :]
Provided that the 59[registered or, as the case may be, principal office of the company, corporation, institution, association or body] in all cases is in India ;
60[(26A) “infrastructure capital company” means such company which makes investments by way of acquiring shares or providing long-term finance to any enterprise or undertaking wholly engaged in the business referred to in sub-section (4) of section 80-IA or sub-section (1) of section 80-IAB or an undertaking developing and building a housing project referred to in sub-section (10) of section 80-IB or a project for constructing a hotel of not less than three-star category as classified by the Central Government or a project for constructing a hospital with at least one hundred beds for patients;
(26B) “infrastructure 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 investment by way of acquiring shares or providing long-term finance to any enterprise or undertaking wholly engaged in the business referred to in sub-section (4) of section 80-IA or sub-section (1) of section 80-IAB or an undertaking developing and building a housing project referred to in sub-section (10) of section 80-IB or a project for constructing a hotel of not less than three-star category as classified by the Central Government or a project for constructing a hospital with at least one hundred beds for patients;]
(27) 61[* * *]
(28) “Inspector of Income-tax” means a person appointed to be an Inspector of Income-tax under sub-section 62[(1)] of section 117 ;
63[64(28A) “interest”65 means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;]
66[(28B) “interest on securities” means,—
(i) interest on any security of the Central Government or a State Government ;
(ii) interest on debentures or other securities for money issued by or on behalf of a local authority or a company or a corporation established by a Central, State or Provincial Act ;]
67[(28BB) “insurer” means an insurer, being an Indian insurance company, as defined under clause (7A) of section 268 of the Insurance Act, 1938 (4 of 1938), which has been granted a certificate of registration under section 3 of that Act;]
69[(28C) “Joint Commissioner” means a person appointed to be a Joint Commissioner of Income-tax or an Additional Commissioner of Income-tax under sub-section (1) of section 117;
(28D) “Joint Director” means a person appointed to be a Joint Director of Income-tax or an Additional Director of Income-tax under sub-section (1) of section 117;]
(29) “legal representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908)70 ;
71[(29A) “long-term capital asset” means a capital asset which is not a short-term capital asset ;
(29B) “long-term capital gain” means capital gain arising from the transfer of a long-term capital asset ;]
72[(29BA) “manufacture”, with its grammatical variations, means a change in a non-living physical object or article or thing,—
(a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or
(b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure;]
73[(29C) “maximum marginal rate” means the rate of income-tax (including surcharge on income-tax, if any) applicable in relation to the highest slab of income in the case of an individual 74[, association of persons or, as the case may be, body of individuals] as specified in the Finance Act of the relevant year ;]
75[(29D) “National Tax Tribunal” means the National Tax Tribunal established under section 3 of the National Tax Tribunal Act, 2005;]
(30) “non-resident” means a person who is not a “resident” 76[, and for the purposes of sections 9277, 93 78[* * *] and 168, includes a person who is not ordinarily resident within the meaning of clause (6) of section 6] ;
79(31) “person”80 includes—
(i) an individual80,
(ii) a Hindu undivided family80,
(iii) a company,
(iv) a firm81,
(v) an association of persons81 or a body of individuals81, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
82[Explanation.—For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or esta-blished or incorporated with the object of deriving income, profits or gains;]
(32) “person who has a substantial interest in the company”, in relation to a company, means a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent of the voting power ;
(33) “prescribed” means prescribed by rules made under this Act ;
(34) “previous year” means the previous year as defined in section 3 ;
82a[(34A) “Principal Chief Commissioner of Income-tax” means a person appointed to be a Principal Chief Commissioner of Income-tax under sub-section (1) of section 117;
(34B) “Principal Commissioner of Income-tax” means a person appointed to be a Principal Commissioner of Income-tax under sub-section (1) of section 117;
(34C) “Principal Director of Income-tax” means a person appointed to be a Principal Director of Income-tax under sub-section (1) of section 117;
(34D) “Principal Director General of Income-tax” means a person appointed to be a Principal Director General of Income-tax under sub-section (1) of section 117;]
83(35) “principal officer”, used with reference to a local authority or a company or any other public body or any association of persons or any body of individuals, means—
(a) the secretary, treasurer, manager or agent of the authority, company, association or body, or
(b) any person connected with the management or administration of the local authority, company, association or body upon whom the 84[Assessing] Officer has served a notice of his intention of treating him as the principal officer thereof ;
85(36) “profession” includes vocation86 ;
87[(36A) “public sector company” means any corporation established by or under any Central, State or Provincial Act or a Government com-pany88 as defined in section 617 of the Companies Act, 1956 (1 of 1956) ;]
(37) 89“public servant” has the same meaning as in section 21 of the Indian Penal Code (45 of 1860) ;
90[(37A) “rate or rates in force” or “rates in force”, in relation to an assessment year or financial year, means—
(i) for the purposes of calculating income-tax under the first proviso to sub-section (5) of section 132, or computing the income-tax chargeable under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2) of section 176 or deducting income-tax under section 192 from income charge-able under the head “Salaries” 91[* * *] or 92[computation of the “advance tax” payable under Chapter XVII-C in a case not falling under 93[section 115A or section 115B 94[or section 115BB 95[or section 115BBB] or section 115E] or] section 164 94[or section 164A 96[* * *]] 97[or section 167B], the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year, and for the purposes of computation of the “advance tax” payable under Chapter XVII-C 98[in a case falling under section 115A or section 115B 99[or section 115BB 1[or section 115BBB] or section 115E] or section 164 99[or section 164A 2[* * *]] 3[or section 167B], the rate or rates specified in section 115A or 4[section 115B or section 115BB 5[or section 115BBB] or section 115E or section 164 or section 164A 2[* * *] 3[or section 167B], as the case may be,] or the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year, whichever is applicable ;]
(ii) for the purposes of deduction of tax under sections 193, 194, 194A 6[, 194B] 7[, 194BB] 8[and 194D], the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year ;]
9[(iii) for the purposes of deduction of tax under section 195, the rate or rates of income-tax specified in this behalf in the Finance Act of the relevant year or the rate or rates of income-tax specified in 10[an agreement entered into by the Central Government under section 90, or an agreement notified by the Central Government under section 90A, whichever is applicable by virtue of the provisions of section 90, or section 90A, as the case may be];]
11(38) “recognised provident fund”12 means a provident fund which has been and continues to be recognised by the 13[13a[Principal Chief Commissioner or] Chief Commissioner or 13a[Principal Commissioner or] Commissioner] in accordance with the rules contained in Part A of the Fourth Schedule, and includes a provident fund established under a scheme framed under the Employees’ Provident Funds Act, 1952 (19 of 1952) ;
(39) 14[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993;]
(40) “regular assessment”15 means the assessment made under 16[sub-section (3) of] section 143 or section 144 ;
(41) “relative”, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual ;
17[(41A) “resulting company” means one or more companies (including a wholly owned subsidiary thereof) to which the undertaking of the demerged company is transferred in a demerger and, the resulting company in consideration of such transfer of undertaking, issues shares to the shareholders of the demerged company and includes any authority or body or local authority or public sector company or a company established, constituted or formed as a result of demerger;]
(42) “resident” means a person who is resident in India within the meaning of section 6 ;
18[19(42A) 20[“short-term capital asset” means a capital asset held by an assessee for not more than 21[thirty-six] months immediately preceding the date of its transfer22 :]
23[Provided that in the case of 23a[a share held in a company 24[or any other security listed in a recognised stock exchange in India] or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or 24a[a unit of a Mutual Fund specified under clause (23D) of section 10]] 25[or a zero coupon bond], the provisions of this clause shall have effect as if for the words “thirty-six months”, the words “twelve months” had been substituted.]
The following second proviso shall be inserted after the existing proviso to clause (42A) of section 2 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided further that in case of a share of company (not being a share listed in a recognised stock exchange) or a unit of a Mutual Fund specified under clause (23D) of section 10, which is transferred during the period beginning on the 1st day of April, 2014 and ending on the 10th day of July, 2014, the provisions of this clause shall have effect as if for the words “thirty-six months”, the words “twelve months” had been substituted.
26[Explanation 1].—(i) In determining the period for which any capital asset is held by the assessee—
(a) in the case of a share held in a company in liquidation, there shall be excluded the period subsequent to the date on which the company goes into liquidation ;
(b) in the case of a capital asset which becomes the property of the assessee in the circumstances mentioned in 27[sub-section (1)] of section 49, there shall be included the period for which the asset was held by the previous owner referred to in the said section ;
28[(c) in the case of a capital asset being a share or shares in an Indian company, which becomes the property of the assessee in consideration of a transfer referred to in clause (vii) of section 47, there shall be included the period for which the share or shares in the amalgamating company were held by the assessee ;]
29[(d) in the case of a capital asset, being a share or any other security (hereafter in this clause referred to as the financial asset) subscribed to by the assessee on the basis of his right to subscribe to such financial asset or subscribed to by the person in whose favour the assessee has renounced his right to subscribe to such financial asset, the period shall be reckoned from the date of allotment of such financial asset ;
(e) in the case of a capital asset, being the right to subscribe to any financial asset, which is renounced in favour of any other person, the period shall be reckoned from the date of the offer of such right by the company or institution, as the case may be, making such offer ;]
30[(f) in the case of a capital asset, being a financial asset, allotted without any payment and on the basis of holding of any other financial asset, the period shall be reckoned from the date of the allotment of such financial asset ;]
31[(g) in the case of a capital asset, being a share or shares in an Indian company, which becomes the property of the assessee in consi-deration of a demerger, there shall be included the period for which the share or shares held in the demerged company were held by the assessee ;]
32[(h) in the case of a capital asset, being trading or clearing rights of a recognised stock exchange in India acquired by a person pursuant to demutualisation or corporatisation of the recognised stock exchange in India as referred to in clause (xiii) of section 47, there shall be included the period for which the person was a member of the recognised stock exchange in India immediately prior to such demutualisation or corporatisation;
(ha) in the case of a capital asset, being equity share or shares in a company allotted pursuant to demutualisation or corporatisation of a recognised stock exchange in India as referred to in clause (xiii) of section 47, there shall be included the period for which the person was a member of the recognised stock exchange in India immediately prior to such demutualisation or corporatisation;]
33[(hb) in the case of a capital asset, being any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer free of cost or at concessional rate to his employees (including former employee or employees), the period shall be reckoned from the date of allotment or transfer of such specified security or sweat equity shares;]
33a[(hc) in the case of a capital asset, being a unit of a business trust, allotted pursuant to transfer of share or shares as referred to in clause (xvii) of section 47, there shall be included the period for which the share or shares were held by the assessee;]
(ii) In respect of capital assets other than those mentioned in clause (i), the period for which any capital asset is held by the assessee shall be determined subject to any rules which the Board may make in this behalf.]
34[Explanation 2.—For the purposes of this clause, the expression “security”35 shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).]
36[Explanation 3.—For the purposes of this clause, the expressions “specified security” and “sweat equity shares” shall have the meanings respectively assigned to them in the Explanation to clause (d) of sub-section (1) of section 115WB;]
The following Explanation 4 shall be inserted after Explanation 3 to clause (42A) of section 2 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Explanation 4.—For the purposes of this clause, the expression “equity oriented fund” shall have the meaning assigned to it in the Explanation to clause (38) of section 10;
37[(42B) “short-term capital gain” means capital gain arising from the transfer of a short-term capital asset ;]
38[(42C) “slump sale”39 means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.
Explanation 1.—For the purposes of this clause, “undertaking” shall have the meaning assigned to it in Explanation 1 to clause (19AA).
Explanation 2.—For the removal of doubts, it is hereby declared that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities ;]
40[(43) “tax” in relation to the assessment year commencing on the 1st day of April, 1965, and any subsequent assessment year means income-tax chargeable under the provisions of this Act, and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this Act prior to the aforesaid date 41[and in relation to the assessment year commencing on the 1st day of April, 2006, and any subsequent assessment year includes the fringe benefit tax payable under section 115WA] ;]
42[(43A) “tax credit certificate” means a tax credit certificate granted to any person in accordance with the provisions of Chapter XXII-B43 and any scheme made thereunder ;]
(43B) 44[* * *]
45[(44) “Tax Recovery Officer” means any Income-tax Officer who may be authorised by the 45a[Principal Chief Commissioner or] Chief Commissioner or 45a[Principal Commissioner or] Commissioner, by general or special order in writing, to exercise the powers of a Tax Recovery Officer 46[and also to exercise or perform such powers and functions which are conferred on, or assigned to, an Assessing Officer under this Act and which may be prescribed];]
(45) “total income” means the total amount of income referred to in section 5, computed in the manner laid down in this Act ;
(46) 47[* * *]
48(47) 49[“transfer”50, in relation to a capital asset, includes,—
(i) the sale50, exchange50 or relinquishment50 of the asset ; or
(ii) the extinguishment of any rights therein50 ; or
(iii) the compulsory acquisition thereof under any law ; or
(iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment ;] 51[or]
52[(iva) the maturity or redemption of a zero coupon bond; or]
53[(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A54 of the Transfer of Property Act, 1882 (4 of 1882) ; or
(vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immov-able property.
55[Explanation 1].—For the purposes of sub-clauses (v) and (vi), “immovable property” shall have the same meaning as in clause (d) of section 269UA.]
56[Explanation 2.—For the removal of doubts, it is hereby clarified that “transfer” includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India;]
57[(48) “zero coupon bond” means a bond—
(a) issued by any infrastructure capital company or infrastructure capital fund or public sector company 58[or scheduled bank] on or after the 1st day of June, 2005;
(b) in respect of which no payment and benefit is received or receivable before maturity or redemption from infrastructure capital company or infrastructure capital fund or public sector company 58[or scheduled bank]; and
(c) which the Central Government may, by notification59 in the Official Gazette, specify in this behalf.
60[Explanation.—For the purposes of this clause, the expression “scheduled bank” shall have the meaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause (viia) of sub-section (1) of section 36.]]
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Section 3: 61[“Previous year” defined.
- For the purposes of this Act, “previous year” means the financial year immediately preceding the assessment year :
Provided that, in the case of a business or profession newly set up, or a source of income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year.]
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CHAPTER II: BASIS OF CHARGE
Section 4: Charge of income-tax.
- 62 63(1) Where any Central Act enacts that income-tax64 shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year 65in accordance with, and 66[subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income65 of the previous year 67[* * *] of every person :
Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly.
(2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act.
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Section 5: Scope of total income.
- 68 69(1) Subject to70 the provisions of this Act, the total income65 of any previous year of a person who is a resident includes all income from whatever source derived which—
(a) is received71 or is deemed to be received71 in India in such year by or on behalf of such person ; or
(b) accrues or arises71 or is 71deemed to accrue or arise to him in India during such year ; or
(c) accrues or arises71 to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6)* of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India.
(2) Subject to72 the provisions of this Act, the total income73 of any previous year of a person who is a non-resident includes all income from whatever source derived which—
(a) is received73a or is deemed to be received73a in India in such year by or on behalf of such person ; or
(b) accrues or arises73a or is 73adeemed to accrue or arise to him in India during such year.
Explanation 1.—Income accruing or arising outside India shall not be deemed to be received73a in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India.
Explanation 2.—For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued74 or arisen74 or is deemed to have accrued74 or arisen74 to him shall not again be so included on the basis that it is received or deemed to be received by him in India.
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Section 5A: 75[Apportionment of income between spouses governed by Portuguese Civil Code.
- (1) Where the husband and wife are governed by the system of commu- nity of property (known under the Portuguese Civil Code of 1860 as “COMMUNIAO DOS BENS”) in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu, the income of the husband and of the wife under any head of income shall not be assessed as that of such community of proper-ty (whether treated as an association of persons or a body of individuals), but such income of the husband and of the wife under each head of income (other than under the head “Salaries”) shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly.
(2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head “Salaries”, such income shall be included in the total income of the spouse who has actually earned it.]
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Section 6: Residence in India.
- 76 For the purposes of this Act,—
(1) An individual is said to be resident in India in any previous year, if he—
(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or
(b) 77[* * *]
(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.
78[Explanation.—In the case of an individual,—
(a) being a citizen of India, who leaves India in any previous year 79[as a member of the crew of an 80Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;
(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and 81[eighty-two] days” had been substituted.]
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management81a of its affairs81a is situated wholly81a outside India.
(3) A company is said to be resident in India in any previous year, if—
(i) it is an Indian company ; or
(ii) during that year, the control and management82 of its affairs82 is situated wholly82 in India.
(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.
(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.
83[(6) A person is said to be “not ordinarily resident” in India in any previous year if such person is—
(a) an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or
(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.]
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Section 7: Income deemed to be received.
- The following incomes shall be deemed to be received in the previous year :—
(i) the annual accretion in the previous year to the balance at the credit of an employee participating in a recognised provident fund, to the extent provided in rule 6 of Part A of the Fourth Schedule ;
(ii) the transferred balance in a recognised provident fund, to the extent provided in sub-rule (4) of rule 11 of Part A of the Fourth Schedule ;
84[(iii) the contribution made, by the Central Government 85[or any other employer] in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD.]
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Section 8: Dividend income.
- 86[For the purposes of inclusion in the total income of an assessee,—
(a) any dividend] declared by a company or distributed or paid by it within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2 shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be ;
87[(b) any interim dividend shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.]
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Section 9: Income deemed to accrue or arise in India.
- 88 89(1) The following incomes shall be deemed90 to accrue or arise in India :—
91(i) all income accruing or arising, whether directly or indirectly92, through or from any business connection92 in India, or through or from any property92 in India, or through or from any asset or source of income in India, 93[* * *] or through the transfer of a capital asset situate in India.
94[Explanation 1].—For the purposes of this clause—
(a) in the case of a business of which all the operations95 are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations95 carried out in India ;
(b) in the case of a non-resident, no income shall be deemed to accrue or arise in India to him through or from operations which are confined to the purchase of goods in India for the purpose of export ;
96[* * *]
97[(c) in the case of a non-resident, being a person engaged in the business of running a news agency or of publishing newspapers, magazines or journals, no income shall be deemed to accrue or arise in India to him through or from activities which are confined to the collection of news and views in India for transmission out of India ;]
98[(d) in the case of a non-resident, being—
(1) an individual who is not a citizen of India ; or
(2) a firm which does not have any partner who is a citizen of India or who is resident in India ; or
(3) a company which does not have any shareholder who is a citizen of India or who is resident in India,
no income shall be deemed to accrue or arise in India to such individual, firm or company through or from operations99 which are confined to the shooting of any cinematograph film in India.]
1[Explanation 2.—For the removal of doubts, it is hereby declared that “business connection” shall include any business activity carried out through a person who, acting on behalf of the non-resident,—
(a) has and habitually exercises in India, an authority to conclude contracts on behalf of the non-resident, unless his activities are limited to the purchase of goods or merchandise for the non-resident; or
(b) has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non-resident; or
(c) habitually secures orders in India, mainly or wholly for the non-resident or for that non-resident and other non-residents controlling, controlled by, or subject to the same common control, as that non-resident:
Provided that such business connection shall not include any business activity carried out through a broker, general commission agent or any other agent having an independent status, if such broker, general commission agent or any other agent having an independent status is acting in the ordinary course of his business :
Provided further that where such broker, general commission agent or any other agent works mainly or wholly on behalf of a non-resident (hereafter in this proviso referred to as the principal non-resident) or on behalf of such non-resident and other non-residents which are controlled by the principal non-resident or have a controlling interest in the principal non-resident or are subject to the same common control as the principal non-resident, he shall not be deemed to be a broker, general commission agent or an agent of an independent status.
Explanation 3.—Where a business is carried on in India through a person referred to in clause (a) or clause (b) or clause (c) of Explanation 2, only so much of income as is attributable to the operations carried out in India shall be deemed to accrue or arise in India.]
2[Explanation 4.—For the removal of doubts, it is hereby clarified that the expression “through” shall mean and include and shall be deemed to have always meant and included “by means of”, “in consequence of” or “by reason of”.
Explanation 5.—For the removal of doubts, it is hereby clarified that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India;]
(ii) income which falls under the head “Salaries”, if it is earned3 in India.
4[Explanation.—For the removal of doubts, it is hereby declared that the income of the nature referred to in this clause payable for—
(a) service rendered in India; and
(b) the rest period or leave period which is preceded and succeeded by services rendered in India and forms part of the service contract of employment,
shall be regarded as income earned in India ;]
(iii) income chargeable under the head “Salaries” payable by the Government to a citizen of India for service outside India ;
(iv) a dividend paid by an Indian company outside India ;
5[(v) income by way of interest payable by—
(a) the Government ; or
(b) a person who is a resident, except where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or
(c) a person who is a non-resident, where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person in India ;
(vi) income by way of royalty6 payable by—
(a) the Government ; or
(b) a person who is a resident, except where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or
(c) a person who is a non-resident, where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India :
Provided that nothing contained in this clause shall apply in relation to so much of the income by way of royalty as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process or trade mark or similar property, if such income is payable in pursuance of an agreement made before the 1st day of April, 1976, and the agreement is approved by the Central Government :
7[Provided further that nothing contained in this clause shall apply in relation to so much of the income by way of royalty as consists of lump sum payment made by a person, who is a resident, for the transfer of all or any rights (including the granting of a licence) in respect of computer software supplied by a non-resident manufacturer along with a computer or computer-based equipment under any scheme approved under the Policy on Computer Software Export, Software Development and Training, 1986 of the Government of India.]
Explanation 1.—For the purposes of the 8[first] proviso, an agree-ment made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date; so, however, that, where the recipient of the income by way of royalty is a foreign company, the agreement shall not be deemed to have been made before that date unless, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for the assessment year commencing on the 1st day of April, 1977, or the assessment year in respect of which such income first becomes chargeable to tax under this Act, whichever assessment year is later, the company exercises an option by furnishing a declaration in writing to the 9[Assessing] Officer (such option being final for that assessment year and for every subsequent assessment year) that the agreement may be regarded as an agreement made before the 1st day of April, 1976.
Explanation 2.—For the purposes of this clause, “royalty” means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head “Capital gains”) for—
(i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ;
(ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ;
(iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ;
(iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ;
10[(iva) the use or right to use any industrial, commercial or scientific equipment10a but not including the amounts referred to in section 44BB;]
(v) the transfer of all or any rights (including the granting of a licence) in respect of10a any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films ; or
(vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to 10[(iv), (iva) and] (v).
11[Explanation 3.—For the purposes of this clause, “computer software” means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customized electronic data.]
12[Explanation 4.—For the removal of doubts, it is hereby clarified that the transfer of all or any rights in respect of any right, property or information includes and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which such right is transferred.
Explanation 5.—For the removal of doubts, it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not—
(a) the possession or control of such right, property or information is with the payer;
(b) such right, property or information is used directly by the payer;
(c) the location of such right, property or information is in India.
Explanation 6.—For the removal of doubts, it is hereby clarified that the expression “process” includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret;]
(vii) income by way of fees for technical services13 payable by—
(a) the Government ; or
(b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person14 outside India or for the purposes of making or earning any income from any source outside India13 ; or
(c) a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India :
15[Provided that nothing contained in this clause shall apply in relation to any income by way of fees for technical services payable in pursuance of an agreement made before the 1st day of April, 1976, and approved by the Central Government.]
15[Explanation 1.—For the purposes of the foregoing proviso, an agreement made on or after the 1st day of April, 1976, shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date.]
Explanation 15[2].—For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consi-deration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction16, assembly, mining or like project undertaken by the recipient16 or consideration which would be income of the recipient chargeable under the head “Salaries”.]
(2) Notwithstanding anything contained in sub-section (1), any pension payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in India, if the pension is payable to a person referred to in article 314 of the Constitution or to a person who, having been appointed before the 15th day of August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India.
17[Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,—
(i) the non-resident has a residence or place of business or business connection in India; or
(ii) the non-resident has rendered services in India.]
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CHAPTER III: INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME
Section 10: Incomes not included in total income.
- In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included—
(1) agricultural income ;
18(2) 19[subject to the provisions of sub-section (2) of section 64,] any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family ;
20[(2A) 20ain the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm.
- —For the purposes of this clause, the share of a partner in the total income of a firm separately assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to such profits ;]
(3) 21[***]
22[(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the Central Government may, by notification in the Official Gazette23, specify in this behalf, including income by way of premium on the redemption of such bonds :
24[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such securities or bonds on or after the 1st day of June, 2002;]
25[26(ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with 27[the Foreign Exchange Management Act, 1999 (42 of 1999)], and the rules made thereunder :
Provided that such individual is a person resident outside India as defined in clause (q) of section 228 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account ;]]
29[***]
30[(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-resident, any income from interest on such savings certificates issued 31[before the 1st day of June, 2002] by the Central Government as that Government may, by notification in the Official Gazette32, specify in this behalf :
Provided that the individual has subscribed to such certificates in convertible foreign exchange remitted from a country out- side India in accordance with the provisions of 33[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder.
- —For the purposes of this clause,—
(a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India ;
(b) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of 33[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder ;]
34[(5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—
(a) from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;
(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,
subject to such conditions as may be prescribed35 (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government :
Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.
- —For the purposes of this clause, “family”, in relation to an individual, means—
(i) the spouse and children of the individual ; and
(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual; ]
(5A) 36[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(5B) 37[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
(6) in the case of an individual who is not a citizen of India,—
(i) 38[***]
39[(ii) the remuneration received by him as an official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign State, or as a member of the staff of any of these officials, for service in such capacity :
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 honorary capacity), or as a member of the staff of any of those officials, shall be exempt only if the remuneration of the corres-ponding officials or, as the case may be, members of the staff, if any, of the Government resident for similar purposes in the country concerned enjoys a similar exemption in that country :
Provided further that such members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in India otherwise than as members of such staff ;]
(iii) to (v) [Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f. 1-4-1989;]
(vi) the remuneration received by him as an employee of a foreign enterprise for services rendered by him during his stay in India, provided the following conditions are fulfilled—
(a) the foreign enterprise is not engaged in any trade or business in India ;
(b) his stay in India does not exceed in the aggregate a period of ninety days in such previous year ; and
(c) such remuneration is not liable to be deducted from the income of the employer chargeable under this Act ;
(via) 40[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(vii) 41[Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;]
(viia) 42[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(viii) any income chargeable under the head “Salaries” received by or due to any such individual being a non-resident as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate a period of ninety days in the previous year ;
(ix) 43[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(x) 44[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
45[(xi) the remuneration received by him as an employee of the Government of a foreign State during his stay in India in connection with his training in any establishment or office of, or in any undertaking owned by,—
(i) the Government ; or
(ii) any company in which the entire paid-up share capital is held by the Central Government, or any State Government or Governments, or partly by the Central Government and partly by one or more State Governments ; or
(iii) any company which is a subsidiary of a company referred to in item (ii) ; or
(iv) any corporation established by or under a Central, State or Provincial Act ; or
(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 Cen-tral Government, or any State Government or State Governments, or partly by the Central Government and partly by one or more State Governments ;]
46[(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 foreign company with Government or the Indian concern after the 31st day of March, 1976 47[but before the 1st day of June, 2002] 48[and,—
(a) where the agreement relates to a matter included in the industrial policy, for the time being in force, of the Government of India, such agreement is in accordance with that policy ; and
(b) in any other case, the agreement is approved by the Central Government,
the tax on such income is payable, under the terms of the agreement, by Government or the Indian concern to the Central Government, the tax so paid].
- —For the purposes of this clause 49[and clause (6B)],—
(a) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9 ;
(b) “foreign company” shall have the same meaning as in section 80B ;
(c) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;]
49[(6B) where in the case of a non-resident (not being a company) or of a foreign company deriving income (not being salary, royalty or fees for technical services) from Government or an Indian concern in pur-suance of an agreement entered into 50[before the 1st day of June, 2002] by the Central Government 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 agreement or any other related agreement approved 50[before that date] by the Central Government, the tax so paid ;]
51[(6BB) where in the case of the Government of a foreign State or a foreign enterprise deriving income from an Indian company engaged in the business of operation of aircraft, as a consideration of acquiring an aircraft or an aircraft engine (other than payment for providing spares, facilities or services in connection with the operation of leased aircraft) on lease under 52[an agreement entered into after the 31st day of March, 1997 but before the 1st day of April, 1999, or entered into after the 53[31st day of March, 54[2007]] and approved by the Central Government in this behalf] and the tax on such income is payable by such Indian company under the terms of that agreement to the Central Government, the tax so paid.
Explanation.—For the purposes of this clause, the expression “foreign enterprise” means a person who is a non-resident;]
55[(6C) any income arising to such foreign company, as the Central Government may, by notification56 in the Official Gazette, specify in this behalf, by way of 57[royalty or] fees for technical services received in pursuance of an agreement entered into with that Government for providing services in or outside India in projects connected with security of India ;]
(7) any allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India ;
(8) in the case of an individual who is assigned to duties in India in connection with any co-operative 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 exemption given by this clause)—
(a) the remuneration received by him directly or indirectly from the Government of that foreign State for such duties, and
(b) any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the Government of that foreign State ;
58[(8A) in the case of a consultant—
(a) any remuneration or fee received by him or it, directly or indirectly, out of the funds made available to an international organisation [hereafter referred to in this clause and clause (8B) as the agency] under a technical assistance grant agreement between the agency and the Government of a foreign State ; and
(b) any other income which accrues or arises to him or it outside India, and is not deemed to accrue or arise in India, in respect of which such consultant is required to pay any income or social security tax to the Government of the country of his or its origin.
- —In this clause, “consultant” means—
(i) any individual, who is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; or
(ii) any other person, being a non-resident,
engaged by the agency for rendering technical services in India in connection with any technical assistance programme or project, provided the following conditions are fulfilled, namely :—
(1) the technical assistance is in accordance with an agreement entered into by the Central Government and the agency ; and
(2) the agreement relating to the engagement of the consultant is approved by the prescribed authority59 for the purposes of this clause ;
(8B) in the case of an individual who is assigned to duties in India in connection with any technical assistance programme and project in accordance with an agreement entered into by the Central Government and the agency—
(a) the remuneration received by him, directly or indirectly, for such duties from any consultant referred to in clause (8A) ; and
(b) any other income of such individual which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such individual is required to pay any income or social security tax to the country of his origin, provided the following conditions are fulfilled, namely :—
(i) the individual is an employee of the consultant referred to in clause (8A) and is either not a citizen of India or, being a citizen of India, is not ordinarily resident in India ; and
(ii) the contract of service of such individual is approved by the prescribed authority60 before the commencement of his service ;]
(9) the income of any member of the family of any such individual as is referred to in clause (8) 61[or clause (8A) or, as the case may be, clause (8B)] accompanying him to India, which accrues or arises outside India, and is not deemed to accrue or arise in India, in respect of which such member is required to pay any income or social security tax to the Government of that foreign State 62[or, as the case may be, country of origin of such member];
63[64(10) 65(i) any death-cum-retirement 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 connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence services ;
(ii) any gratuity received under the Payment of Gratuity Act, 1972 (39 of 1972), to the extent it does not exceed an amount calculated in accordance with the provisions of sub-sections (2) and (3) of section 466 of that Act ;
(iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, or any gratuity received by his widow, children or dependants on his death, to the extent it does not, in either case, exceed one-half month’s salary for each year of completed service67, 68[calculated on the basis of the average salary for the ten months immediately preceding the month in which any such event occurs, subject to such limit69 as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit applicable in this behalf to the employees of that Government] :
Provided that where any gratuities referred to in this clause70 are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this clause 71[shall not exceed the limit so specified] :
Provided further that where any such gratuity or gratuities was or were received in any one or more earlier previous years also and the whole or any part of the amount of such gratuity or gratuities was not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this clause 71[shall not exceed the limit so specified] as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.
72[* * *]
- —73[In this clause, and in clause (10AA)], “salary” shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule ;]
74[75(10A) 76(i) any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable 77[to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the defence services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority] or a corporation established by a Central, State or Provincial Act ;
(ii) any payment in commutation of pension received under any scheme of any other employer, to the extent it does not exceed—
(a) in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and
(b) in any other case, the commuted value of one-half of such pension,
such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognised tables of mortality ;
78[* * *]
79[ (iii) any payment in commutation of pension received from a fund under clause (23AAB) ;]
80[81(10AA) (i) any payment received by an employee of the Central Government or a State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his 82retirement 83[whether] on superannuation or otherwise ;
(ii) any payment of the nature referred to in sub-clause (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 earned leave at his credit at the time of his retirement 83[whether] on superannuation 82or otherwise as does not exceed 84[ten] months, calculated on the basis of the average salary drawn by the employee during the period of ten months immediately preceding his retirement 83[whether] on superannuation or otherwise, 85[subject to such limit as the Central Government may, by notification in the Official Gazette, specify in this behalf having regard to the limit86 applicable in this behalf to the employees of that Government] :
Provided that where any such payments are received by an employee from more than one employer in the same previous year, the aggregate amount exempt from income-tax under this sub-clause 87[shall not exceed the limit so specified] :
Provided further that where any such payment or payments was or were received in any one or more earlier previous years also and the whole or any part of the amount of such payment or payments was or were not included in the total income of the assessee of such previous year or years, the amount exempt from income-tax under this sub-clause 88[shall not exceed the limit so specified], as reduced by the amount or, as the case may be, the aggregate amount not included in the total income of any such previous year or years.
89[* * *]
- —For the purposes of sub-clause (ii),—
90[* * *] the entitlement to earned leave of an employee shall not exceed thirty days for every year of actual service rendered by him as an employee of the employer from whose service he has retired ;
91[* * *]
92[(10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or under any other Act or Rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, 93[at the time of his retrenchment :
Provided that the amount exempt under this clause shall not exceed—
(i) an amount calculated in accordance with the provisions of 94clause (b) of section 25F of the Industrial Disputes Act, 1947 (14 of 1947) ; or
95[(ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by notification96 in the Official Gazette, specify in this behalf,]
whichever is less :
Provided further that the preceding proviso shall not apply in respect of any compensation received by a workman in accordance with any scheme which the Central Government may, having regard to the need for extending special protection to the workmen in the undertaking to which such scheme applies and other relevant circumstances, approve in this behalf.]
- —For the purposes of this clause—
(a) compensation received by a workman at the time of the closing down of the undertaking in which he is employed shall be deemed to be compensation received at the time of his retrenchment ;
(b) compensation received by a workman, at the time of the transfer (whether by agreement or by operation of law) of the ownership or management of the undertaking in which he is employed from the employer in relation to that undertaking to a new employer, shall be deemed to be compensation received at the time of his retrenchment if—
(i) the service of the workman has been interrupted by such transfer ; or
(ii) the terms and conditions of service applicable to the workman after such transfer are in any way less favourable to the workman than those applicable to him immediately before the transfer ; or
(iii) the new employer is, under the terms of such transfer or otherwise, legally not liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer ;
97(c) the expressions “employer” and “workman” shall have the same meanings as in the Industrial Disputes Act, 1947 (14 of 1947);]
98[(10BB) any payments made under the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (21 of 1985), and any scheme framed thereunder except payment made to any assessee in connection with the Bhopal Gas Leak Disaster to the extent such assessee has been allowed a deduction under this Act on account of any loss or damage caused to him by such disaster ;]
99[(10BC) any amount received or receivable from the Central Government or a State Government or a local authority by an individual or his legal heir by way of compensation on account of any disaster, except the amount received or receivable to the extent such individual or his legal heir has been allowed a deduction under this Act on account of any loss or damage caused by such disaster.
Explanation.—For the purposes of this clause, the expression “disaster” shall have the meaning assigned to it under clause (d) of section 21 of the Disaster Management Act, 2005 (53 of 2005);]
2[(10C) 3any amount received4 5[or receivable] by an employee of—
(i) a public sector company ; or
(ii) any other company ; or
(iii) an authority established under a Central, State or Provincial Act ; or
(iv) a local 6[authority ; or]
7[(v) a co-operative society ; or
(vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or
(vii) an Indian Institute of Technology within the meaning of clause (g) of section 38 of the Institutes of Technology Act, 1961 (59 of 1961) ; or
9[(viia) any State Government; or]
10[(viib) the Central Government; or]
11[(viic) an institution, having importance throughout India or in any State or States, as the Central Government may, by notification in the Official Gazette12, specify in this behalf; or]
(viii) such institute of management as the Central Government may, by notification13 in the Official Gazette, specify in this behalf,]
14[on his] 15[voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i), a scheme of voluntary separation, to the extent such amount does not exceed five lakh rupees] :
Provided that the schemes of the said companies or authorities 16[or societies or Universities or the Institutes referred to in sub-clauses (vii) and (viii)], as the case may be, governing the payment of such amount are framed in accordance with such guidelines (including inter alia criteria of economic viability) as may be 17prescribed 18[***]:
Provided further that where exemption has been allowed to an employee under this clause for any assessment year, no exemption thereunder shall be allowed to him in relation to any other assessment year :]
19[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 him in relation to such, or any other, assessment year;]
20[(10CC) in the case of an employee, being an individual deriving income in the nature of a perquisite, not provided for by way of monetary payment, within the meaning of clause (2) of section 17, the tax on such income actually paid by his employer, at the option of the employer, on behalf of such employee, notwithstanding anything contained in section 20021 of the Companies Act, 1956 (1 of 1956);]
22[(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy, other than—
(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section 80DDA*; or
(b) any sum received under a Keyman insurance policy; or
(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 23[but on or before the 31st day of March, 2012] in respect of which the premium payable for any of the years during the term of the policy exceeds twenty per cent of the actual capital sum assured 23[; or]
23[(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 exceeds ten per cent of the actual capital sum assured:]
Provided that the provisions of 24[sub-clauses (c) and (d)] shall not apply to any sum received on the death of a person:
Provided further that for the purpose of calculating the actual capital sum assured under 25[sub-clause (c)], effect shall be given to the 26[Explanation to sub-section (3) of section 80C or the Explanation to sub-section (2A) of section 88, as the case may be] :
27[Provided also that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—
(i) a person with disability or a person with severe disability as referred to in section 80U; or
(ii) suffering from disease or ailment as specified in the rules made under section 80DDB,
the provisions of this sub-clause shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted.]
28[Explanation 1].—For the purposes of this clause, “Keyman insurance policy” means a life insurance 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-mentioned person 29[and includes such policy which has been assigned to a person, at any time during the term of the policy, with or without any consideration];]
30[Explanation 2.—For the purposes of sub-clause (d), the expression “actual capital sum assured” shall have the meaning assigned to it in the Explanation to sub-section (3A) of section 80C;]
(11) any payment from a provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies 31[or from any other provident fund set up by the Central Government and notified32 by it in this behalf in the Official Gazette];
(12) the accumulated balance due and becoming payable to an employee participating in a recognised provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule ;
33[(13) any payment from an approved superannuation fund made—
(i) on the death of a beneficiary ; or
(ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapa-citated prior to such retirement ; or
(iii) by way of refund of contributions on the death of a beneficiary ; or
(iv) by way of refund of contributions to an employee on his leaving the service in connection with which the fund is established otherwise than by retirement at or after a specified age or on his becoming incapacitated prior to such retirement, to the extent to which such payment does not exceed the contributions made prior to the commencement of this Act and any interest thereon;]
34[35(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 accommodation occupied by the assessee, to such extent 36[* * *] as may be prescribed37 having regard to the area or place in which such accommodation is situate and other relevant considerations.]
38[Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—
(a) the residential accommodation occupied by the assessee is owned by him ; or
(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him ;]
39[(14) (i) any such special allowance or benefit, not being in the nature of a perquisite within the meaning of clause (2) of section 17, specifically granted to meet expenses wholly, necessarily and exclusively incurred40 in the performance of the duties of an office or employment of profit41, 42[as may be prescribed], to the extent to which such expenses are actually incurred for that purpose ;
(ii) any such allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit41 are ordinarily performed by him or at the place where he ordinarily resides, or to compensate him for the increased cost of living, 43[as may be prescribed and to the extent as may be prescribed] :]
44[Provided that nothing in sub-clause (ii) shall apply to any allowance in the nature of personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment unless such allowance is related to the place of his posting or residence ;]
(14A) 45[***]
(15) 46[(i) income by way of interest, premium on redemption or other payment on such securities, bonds, annuity certificates, savings certificates, other certificates issued by the Central Government and deposits as the Central Government may, by notification47 in the Official Gazette, specify in this behalf, subject to such conditions and limits as may be specified in the said notification ;]
48[(iib) 49[in the case of an individual or a Hindu undivided family,] interest on such Capital Investment Bonds as the Central Government may, by notification50 in the Official Gazette, specify in this behalf :]
51[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such Capital Investment Bonds on or after the 1st day of June, 2002;]
52[(iic) in the case of an individual or a Hindu undivided family, interest on such Relief Bonds53 as the Central Government may, by notification in the Official Gazette, specify in this behalf ;]
54[(iid) interest on such bonds, as the Central Government may, by notification55 in the Official Gazette, specify, arising to—
(a) a non-resident Indian, being an individual owning the bonds ; or
(b) any individual owning the bonds by virtue of being a nominee or survivor of the non-resident Indian ; or
(c) any individual to whom the bonds have been gifted by the non-resident Indian :
Provided that the aforesaid bonds are purchased by a non-resident Indian in foreign exchange and the interest and principal received in respect of such bonds, whether on their maturity or otherwise, is not allowable to be taken out of India :
Provided further that where an individual, who is a non-resident Indian in any previous year in which the bonds are acquired, becomes a resident in India in any subsequent year, the provisions of this sub-clause shall continue to apply in relation to such individual :
Provided also that in a case where the bonds are encashed in a previous year prior to their maturity by an individual who is so entitled, the provisions of this sub-clause shall not apply to such individual in relation to the assessment year relevant to such previous year :
56[Provided also that the Central Government shall not specify, for the purposes of this sub-clause, such bonds on or after the 1st day of June, 2002.]
- —For the purposes of this sub-clause, the expression “non-resident Indian” shall have the meaning assigned to it in clause (e) of section 115C;]
(iii) interest on securities held by the Issue Department of the Central Bank of Ceylon constituted under the Ceylon Monetary Law Act, 1949;
57[(iiia) interest payable to any bank incorporated in a country outside India and authorised to perform central banking functions in that country on any deposits made by it, with the approval of the Reserve Bank of India, with any scheduled bank.
- —For the purposes of this sub-clause, “scheduled bank” shall have the meaning assigned to it in 58[clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36];]
59[(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 Understanding entered into by the Central Government with that Bank on the 25th day of November, 1986;]
60[(iiic) interest payable to the European Investment Bank, on a loan granted by it in pursuance of the framework-agreement for financial co-operation entered into on the 25th day of November, 1993 by the Central Government with that Bank;]
(iv) interest payable—
61[(a) by Government or a local authority on moneys borrowed by it before the 1st day of June, 2001 from, or debts owed by it before the 1st day of June, 2001 to, sources outside India;]
(b) by an industrial undertaking in India on moneys borrowed by it under 62[a loan agreement entered into before the 1st day of June, 2001 with any such financial institution] in a foreign country as may be approved63 in this behalf by the Central Government by general or special order ;
64(c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it 65[before the 1st day of June, 2001] in a foreign country in respect of the purchase outside India of raw materials 66[or components] or capital plant and machinery, 67[to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf68, having regard to the terms of the loan or debt and its repayment.]
69[70[Explanation 1.]—For the purposes of this item, “purchase of capital plant and machinery” includes the purchase of such capital plant and machinery under a hire-purchase agreement or a lease agreement with an option to purchase such plant and machinery.]
71[Explanation 2.—For the removal of doubts, it is hereby declared that the usance interest payable outside India by an undertaking engaged in the business of ship-breaking in respect of purchase of a ship from outside India shall be deemed to be the interest payable on a debt incurred in a foreign country in respect of the purchase outside India;]
72[(d) by the Industrial Finance Corporation of India established by the Industrial Finance Corporation Act, 1948 (15 of 1948), or the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), 73[or the Export-Import Bank of India established under the Export-Import Bank of India Act, 1981 (28 of 1981),] 74[or the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987),] 75[or the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989),] or the Industrial Credit and Investment Corporation of India [a company formed and registered under the Indian Companies Act, 1913 (7 of 1913)], on any moneys borrowed by it from sources outside India 76[before the 1st day of June, 2001], to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;]
77[(e) by any other financial institution established in India or a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act), on any moneys borrowed by it from sources outside India 78[before the 1st day of June, 2001] under a loan agreement approved by the Central Government 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 consider necessary to import in the public interest, to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;]
79[(f) by an industrial undertaking in India on any moneys borrowed by it in foreign currency from sources outside India under a loan agreement approved by the Central Government 80[before the 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 approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment;
81[(fa) by a scheduled bank 82[***] 83[to a non-resident or to a person who is not ordinarily resident within the meaning of sub-section (6)† of section 6] on deposits in foreign currency where the acceptance of such deposits by the bank is approved by the Reserve Bank of India.
84[Explanation.—For the purposes of this item, the expression “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsi-diary 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 bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank;]
85[(g) by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes, 86[being a company eligible for deduction under clause (viii) of sub-section (1) of section 36] on any moneys borrowed by it in foreign currency from sources outside India under a loan agreement approved by the Central Government 87[before the 1st day of June, 2003], to the extent to which such interest does not exceed the amount of interest calculated at the rate approved by the Central Government in this behalf, having regard to the terms of the loan and its repayment.]
- —For the purposes of 88[items (f) 89[, (fa)] and (g)], the expression 90“foreign currency” shall have the meaning assigned to it in 91[the Foreign Exchange Management Act, 1999 (42 of 1999)];]
92[(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 notification93 in the Official Gazette, specify in this behalf;]
94[(i) by Government on deposits made by an employee of the Central Government or a State Government 95[or a public sector company], in accordance with such scheme as the Central Government may, by notification96 in the Official Gazette, frame in this behalf, out of the moneys due to him on account of his retirement, whether on superannuation or otherwise.]
97[98[Explanation 1].—For the purposes of this sub-clause, the expression “industrial undertaking” means any undertaking which is engaged in—
(a) the manufacture or processing of goods; or
99[(aa) the manufacture of computer software or recording of programme on any disc, tape, perforated media or other information device; or]
(b) the business of generation or distribution of electricity or any other form of power; or
1[(ba) the business of providing telecommunication services; or]
(c) mining; or
(d) the construction of ships; or
2[(da) the business of ship-breaking; or]
3[(e) the operation of ships or aircrafts or construction or operation of rail systems.]]
4[Explanation 1A.—For the purposes of this sub-clause, the expression “interest” shall not include interest paid on delayed payment of loan or on default if it is in excess of two per cent per annum over the rate of interest payable in terms of such loan.]
5[Explanation 2.—For the purposes of this clause, the expression “interest” includes hedging transaction charges on account of currency fluctuation;]
6[(v) interest on—
(a) securities held by the Welfare Commissioner, Bhopal Gas Victims, Bhopal, in the Reserve Bank’s SGL Account No. SL/DH 048;
(b) deposits for the benefit of the victims of the Bhopal gas leak disaster held in such account, with the Reserve Bank of India or with a public sector bank, as the Central Government may, by notification7 in the Official Gazette, specify, whether prospectively or retrospectively but in no case earlier than the 1st day of April, 1994 in this behalf.
- —For the purposes of this sub-clause, the expression “public sector bank” shall have the meaning assigned to it in the Explanation to clause (23D);]
8[(vi) interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government;]
9[(vii) interest on bonds—
(a) issued by a local authority or by a State Pooled Finance Entity; and
(b) specified by the Central Government by notification10 in the Official Gazette.
Explanation.—For the purposes of this sub-clause, the expression “State Pooled Finance Entity” shall mean such entity which is set up in accordance with the guidelines for the Pooled Finance Development Scheme notified by the Central Government in the Ministry of Urban Development;]
11[(viii) any income by way of interest received by a non-resident or a person who is not ordinarily resident, in India on a deposit made on or after the 1st day of April, 2005, in an Offshore Banking Unit12 referred to in clause (u) of section 2 of the Special Economic Zones Act, 2005;]
13[(15A) any payment made, by an Indian company engaged in the business of operation of aircraft, to acquire an aircraft or an aircraft engine (other than a payment for providing spares, facilities or services in connection with the operation of leased aircraft) on lease14 from the Government of a foreign State or a foreign enterprise under an agreement 15[16[, not being an agreement entered into between the 1st day of April, 1997 and the 31st day of March, 1999,] and] approved by the Central Government in this behalf :
17[Provided that nothing contained in this clause shall apply to any such agreement entered into on or after the 18[1st day of April, 19[2007]].]
- —For the purposes of this clause, the expression “foreign enterprise” means a person who is a non-resident;]
20(16) 21scholarships granted to meet the cost of education;
22[(17) any income by way of—
(i) daily allowance received by any person by reason of his membership of Parliament or of any State Legislature or of any Committee thereof; 23[* * *]
24[(ii) any allowance received by any person by reason of his membership of Parliament under the Members of Parliament (Constituency Allowance) Rules, 1986;
25[(iii) any constituency allowance received by any person by reason of his membership of any State Legislature under any Act or rules made by that State Legislature;]]]
26[(17A) any payment made, whether in cash or in kind,—
(i) in pursuance of any award instituted in the public interest by the Central Government or any State Government or instituted by any other body and approved27 by the Central Government in this behalf; or
(ii) as a reward by the Central Government or any State Government for such purposes as may be approved27 by the Central Government in this behalf in the public interest;]
28[(18) any income by way of—
(i) pension received by an individual who has been in the service of the Central Government or State Government and has been awarded “Param Vir Chakra” or “Maha Vir Chakra” or “Vir Chakra” or such other gallantry award as the Central Government may, by notification29 in the Official Gazette, specify in this behalf;
(ii) family pension received by any member of the family of an individual referred to in sub-clause (i).
Explanation.—For the purposes of this clause, the expression “family” shall have the meaning assigned to it in the Explanation to clause (5);]
(18A) 30[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
31[(19) family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the Union, where the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed32;]
33[(19A) the annual value of any one palace in the occupation of a Ruler, being a palace, the annual value whereof was exempt from income-tax before the commencement of the Constitution (Twenty-sixth 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 Jammu and Kashmir (Taxation Concessions) Order, 1958:
Provided that for the assessment year commencing on the 1st day of April, 1972, the annual value of every such palace in the occupation34 of such Ruler during the relevant previous year shall be exempt from income-tax;]
35(20) the income of a local authority which is chargeable under the head 36[* * *] “Income from house property”, “Capital gains” or “Income from other sources” or from a trade or business carried on by it which accrues or arises from the supply of a commodity or service 37[(not being water or electricity) within its own jurisdictional area or from the supply of water or electricity within or outside its own jurisdictional area].
38[Explanation.—For the purposes of this clause, the expression “local authority” means—
(i) Panchayat as referred to in clause (d) of article 243 of the Constitution39; or
(ii) Municipality as referred to in clause (e) of article 243P of the Constitution40; or
(iii) Municipal Committee and District Board,
legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund; or
(iv) Cantonment Board as defined in section 341 of the Cantonments Act, 1924 (2 of 1924);]
(20A) 42[***]
43[44(21) 45any income of a 46[research association] for the time being approved for the purpose of clause (ii) 47[or clause (iii)] of sub-section (1) of section 35:
Provided that the 46[research association]—
(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established, and the provisions of sub-section (2) and sub-section (3) of section 11 shall apply in relation to such accumulation subject to the following modifications, namely :—
(i) in sub-section (2),—
(1) the words, brackets, letters and figure “referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section” shall be omitted;
(2) for the words “to charitable or religious purposes”, the words “for the purposes of 48[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 reference to the “prescribed authority” referred to in clause (ii) 47[or clause (iii)] of sub-section (1) of section 35;
(ii) in sub-section (3), in clause (a), for the words “charitable or religious purposes”, the words “the purposes of 48[scientific research or research in social science or statistical research]” shall be substituted; and
49[(b) does not invest or deposit its funds, other than—
(i) any assets held by the 50[research association] where such assets form part of the corpus of the fund of the association as on the 1st day of June, 1973;
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation), acquired by the 50[research association] before the 1st day of March, 1983;
(iii) any accretion to the shares, forming part of the corpus of the fund mentioned in sub-clause (i), by way of bonus shares allotted to the 50[research association];
(iv) voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification in the Official Gazette, specify,
for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11:]
51[Provided further 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 referred to in clause (b) of the first proviso to this clause, subject to the condition that such voluntary contribution is not held by the 50[research association], otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 1992, whichever is later:
Provided also] that nothing contained in this clause shall apply in relation to any income of the 50[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:]
52[Provided also that where the 50[research association] is approved by the Central Government and subsequently that Government is satisfied that—
(i) the 50[research association] has not applied its income in accordance with the provisions contained in clause (a) of the first proviso; or
(ii) the 50[research association] has not invested or deposited its funds in accordance with the provisions contained in clause (b) of the first proviso; or
(iii) the activities of the 50[research association] are not genuine; or
(iv) the activities of the 53[research association] are not being carried out in accordance with all or any of the conditions subject to which such association was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such association and to the Assessing Officer;]
(22) 54[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
(22A) 55[Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]
56[(22B) any income of such news agency set up in India solely for collection and distribution of news as the Central Government may, by notification57 in the Official Gazette, specify in this behalf:
Provided that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members:
Provided further that any notification issued by the Central Government under this clause shall, 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) as may be specified in the notification:]
58[Provided also that where the news agency has been specified, by notification, by the Central Government and subsequently that Government is satisfied that such news agency has not applied or 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 Assessing Officer;]
(23) 59[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
60[61(23A) any income (other than income chargeable under the head 62[* * *] “Income from house property” or any income received for rendering any specific services or income by way of interest or dividends derived from its investments) of an association or institution established in India having as its object the control, supervision, regulation or encouragement of the profession of law, medicine, accountancy, engineering or architecture or such other profession63 as the Central Government may specify in this behalf, from time to time, by notification in the Official Gazette:
Provided that—
(i) the association or institution applies its income, or accumulates it for application, solely to the objects for which it is established; and
(ii) the association or institution is for the time being approved64 for the purpose of this clause by the Central Government by general or special order:]
65[Provided further that where the association or institution has been approved by the Central Government and subsequently that Government is satisfied that—
(i) such association or institution has not applied or accumulated its income in accordance with the provisions contained in the first proviso; or
(ii) the activities of the association or institution are not being carried out in accordance with all or any of the conditions subject to which such association or institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such association or institution and to the Assessing Officer;]
66[(23AA) any income received by any person on behalf of any Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants;]
67[(23AAA) any income received by any person on behalf of a fund established, for such purposes as may be notified68 by the Board in the Official Gazette, for the welfare of employees or their dependants and of which fund such employees are members if such fund fulfils the following conditions, namely :—
(a) the fund—
(i) applies its income or accumulates it for application, wholly and exclusively to the objects for which it is established; and
(ii) invests its funds and contributions and other sums received by it in the forms or modes specified in sub-section (5) of section 11;
(b) the fund is approved by the 68a[Principal Commissioner or] Commissioner in accordance with the rules69 made in this behalf:
Provided that any such approval shall at any one time have effect for such assessment year or years not exceeding three assessment years as may be specified in the order of approval;]
70[(23AAB) any income of a fund, by whatever name called, set up by the Life Insurance Corporation of India on or after the 1st day of August, 1996 71[or any other insurer] under a pension scheme,—
(i) to which contribution is made by any person for the purpose of receiving pension from such fund;
(ii) which is approved by the Controller of Insurance 72[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), as the case may be].
Explanation.—For the purposes of this clause, the expression “Controller of Insurance” shall have the meaning assigned to it in clause (5B) of section 2 of the Insurance Act, 1938 (4 of 1938)73;]
74[(23B) any income of an institution constituted as a public charitable trust or registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India, and existing solely for the development of khadi or village industries or both, and not for purposes of profit, to the extent such income is attributable to the business of production, sale, or marketing, of khadi or products of village industries:
Provided that—
(i) the institution applies its income, or accumulates it for application, solely for the development of khadi or village industries or both; and
(ii) the institution is, for the time being, approved for the purpose of this clause by the Khadi and Village Industries Commission:
Provided further that the Commission shall not, at any one time, grant such approval for more than three assessment years beginning with the assessment year next following the financial year in which it is granted:
75[Provided also that where the institution has been approved by the Khadi and Village Industries Commission and subsequently that Commission is satisfied that—
(i) the institution has not applied or accumulated its income in accordance with the provisions contained in the first proviso; or
(ii) the activities of the institution are not being carried out in accordance with all or any of the conditions subject to which such institution was approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned institution, by order, withdraw the approval and forward a copy of the order withdrawing the approval to such institution and to the Assessing Officer.]
- —For the purposes of this clause,—
(i) “Khadi and Village Industries Commission” means the Khadi and Village Industries Commission established under the Khadi and Village Industries Commission Act, 1956 (61 of 1956);
(ii) 76“khadi” and “village industries” have the meanings respectively assigned to them in that Act;]
77[(23BB) any income of an authority (whether known as the Khadi and Village Industries Board or by any other name) established in a State by or under a State or Provincial Act for the development of khadi or village industries in the State.
- —For the purposes of this clause, 76“khadi” and “village industries” have the meanings respectively assigned to them in the Khadi and Village Industries Commission Act, 1956 (61 of 1956);]
77[(23BBA) any income of any body or authority (whether or not a body corporate or corporation sole) established, constituted or appointed by or under any Central, State or Provincial Act which provides for the administration of any one or more of the following, that is to say, public religious or charitable trusts or endowments (including maths, temples, gurdwaras, wakfs, churches, synagogues, agiaries or other places of public religious worship) or societies for religious or charitable purposes registered as such under the Societies Registration Act, 1860 (21 of 1860), or any other law for the time being in force:
Provided that nothing in this clause shall be construed to exempt from tax the income of any trust, endowment or society referred to therein;]
78[(23BBB) any income of the European Economic Community derived in India by way of interest, dividends or capital gains from investments made out of its funds under such scheme79 as the Central Government may, by notification in the Official Gazette, specify in this behalf.
- —For the purposes of this clause, “European Economic Community” means the European Economic Community established by the Treaty of Rome of 25th March, 1957;]
80[(23BBC ) any income of the SAARC Fund for Regional Projects set up by Colombo Declaration issued on the 21st day of December, 1991 by the Heads of State or Government of the Member Countries of South Asian Association for Regional Cooperation established on the 8th day of December, 1985 by the Charter of the South Asian Association for Regional Cooperation;]
81[(23BBD) any income of the Secretariat of the Asian Organisation of the Supreme Audit Institutions registered as “ASOSAI-SECRETARIAT” under the Societies Registration Act, 1860 (21 of 1860) for 82[ten previous years relevant to the assessment years beginning on the 1st day of April, 2001 and ending on the 31st day of March, 2011];
(23BBE) any income of the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);]
83[(23BBF) any income of the North-Eastern Development Finance Corporation Limited, being a company formed and registered under the Companies Act, 1956 (1 of 1956) 83a:
Provided that in computing the total income of the North-Eastern Development Finance Corporation Limited, the amount to the extent of—
(i) twenty per cent of the total income for assessment year beginning on the 1st day of April, 2006;
(ii) forty per cent of the total income for assessment year beginning on the 1st day of April, 2007;
(iii) sixty per cent of the total income for assessment year beginning on the 1st day of April, 2008;
(iv) eighty per cent of the total income for assessment year beginning on the 1st day of April, 2009;
(v) one hundred per cent of the total income for assessment year beginning on the 1st day of April, 2010 and any subsequent assessment year or years,
shall be included in such total income;]
84[(23BBG) any income of the Central Electricity Regulatory Commission constituted under sub-section (1) of section 76 of the Electricity Act, 2003 (36 of 2003);]
85[(23BBH) any income of the Prasar Bharati (Broadcasting Corporation of India) established under sub-section (1) of section 3 of the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 (25 of 1990);]
86[87(23C) any income88 received by any person on behalf of—
(i) the Prime Minister’s National Relief Fund; or
(ii) the Prime Minister’s Fund (Promotion of Folk Art); or
(iii) the Prime Minister’s Aid to Students Fund; 89[or]
90[(iiia) the National Foundation for Communal Harmony; or]
91[(iiiab) any university or other educational institution92 existing92 solely92 for educational purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or
(iiiac) 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 philanthropic purposes and not for purposes of profit, and which is wholly or substantially financed by the Government; or
The following Explanation shall be inserted after sub-clause (iiiac) of clause (23C) of section 10 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Explanation.—For the purposes of sub-clauses (iiiab) and (iiiac), any university or other educational institution, hospital or other institution referred therein, shall be considered as being substantially financed by the Government for any previous year, if the Government grant to such university or other educational institution, hospital or other institution exceeds such percentage of the total receipts including any voluntary contributions, as may be prescribed, of such university or other educational institution, hospital or other institution, as the case may be, during the relevant previous year.
(iiiad) any university or other educational institution92 existing92 solely92 for educational purposes and not for purposes of profit if the aggregate annual receipts of such university or educational institution do not exceed the amount of annual receipts as may be prescribed93; or
(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 philanthropic purposes and not for purposes of profit, if the aggregate annual receipts of such hospital or institution do not exceed the amount of annual receipts as may be prescribed93; or]
94[(iv) 95any other fund or institution established for charitable purposes 96[which may be approved by the prescribed authority97], having regard to the objects of the fund or institution and its importance throughout India or throughout any State or States; or
(v) 98any trust (including any other legal obligation) or institution wholly for public religious purposes or wholly for public religious and charitable purposes, 99[which may be approved by the prescribed authority1], 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 properly applied for the objects thereof;
2[(vi) any university or other educational institution3 existing3 solely3 for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved4 by the prescribed authority5; or
(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 philanthropic purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiac) or sub-clause (iiiae) and which may be approved6 by the prescribed authority7:]
Provided that the fund or trust or institution 8[or any university or other educational institution9 or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v) 8[or sub-clause (vi) or sub-clause (via)] shall make an application in the prescribed form10 and manner to the prescribed authority11 for the purpose of grant of the exemption, or continuance thereof, under sub-clause (iv) or sub-clause (v) 12[or sub-clause (vi) or sub-clause (via)] :
13[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, under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), may call for such documents (including audited annual accounts) or information from the fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, as it thinks necessary in order to satisfy itself about the genuineness of the activities of such fund or trust or institution or any university or other educational institution or any hospital or other medical institution, as the case may be, and the prescribed authority may also make such inquiries as it deems necessary in this behalf:]
Provided also that the fund or trust or institution 14[or any university or other educational institution15 or any hospital or other medical institution] referred to in sub-clause (iv) or sub-clause (v) 14[or sub-clause (vi) or sub-clause (via)]—
16[(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years; and]
17[(b) does not invest or deposit its funds, other than—
(i) any assets held by the fund, trust or institution 18[or any university or other educational institution19 or any hospital or other medical institution] where such assets form part of the corpus of the fund, trust or institution 20[or any university or other educational institution or any hospital or other medical institution] as on the 1st day of June, 1973;
21[(ia) any asset, being equity shares of a public company, held by any university or other educational institution or any hospital or other medical institution where such assets form part of the corpus of any university or other educational institution or any hospital or other medical institution as on the 1st day of June, 1998;]
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation), acquired by the fund, trust or institution 22[or any university or other educational institution23 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 sub-clause (i) 24[and sub-clause (ia)], by way of bonus shares allotted to the fund, trust or institution 24a[or any university or other educational institution or any hospital or other medical institution] ;
(iv) voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification in the Official Gazette, specify,
for any period during the previous year otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11:]
Provided also that the exemption under sub-clause (iv) or sub-clause (v) shall not be denied in relation to any funds invested or deposited before the 1st day of April, 1989, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 25[1993] :
26[Provided also that the exemption under sub-clause (vi) or sub-clause (via) shall not be denied in relation to any funds invested or deposited before the 1st day of June, 1998, otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 if such funds do not continue to remain so invested or deposited after the 30th day of March, 2001:]
27[Provided also that the exemption under sub-clause (iv) or sub-clause (v) 26[or sub-clause (vi) or sub-clause (via)] shall not be denied in relation to voluntary contribution, other than voluntary contribution in cash or voluntary contribution of the nature referred to in clause (b) of the third proviso to this sub-clause, subject to the condition that such voluntary contribution is not held by the trust or institution 28[or any university or other educational institution or any hospital or other medical institution], otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 1992, whichever is later:]
Provided also that nothing contained in sub-clause (iv) or sub-clause (v) 29[or sub-clause (vi) or sub-clause (via)] shall apply in relation to any income of the fund or trust or institution 29[or any university or other educational institution or any hospital or other medical institution], 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 any 30[notification issued by the Central Government under sub-clause (iv) or sub-clause (v), before the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President*, shall, at any one time31, 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) as may be specified in the notification:]
32[Provided also that where an application under the first proviso is made on or after the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President,* every notification under sub-clause (iv) or sub-clause (v) shall be issued or approval under 33[sub-clause (iv) or sub-clause (v) or] sub-clause (vi) or sub-clause (via) shall be granted or an order rejecting the application shall be passed within the period of twelve months from the end of the month in which such application was received:
Provided also that where the total income, of the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via), without giving effect to the provisions of the said sub-clauses, exceeds the maximum amount which is not chargeable to tax in any previous year, such trust or institution or any university or other educational institution or any hospital or other medical institution shall get its accounts audited in respect of that year by an accountant as defined in the Explanation below sub-section (2) of section 288 and furnish along with the return of income for the relevant assessment year, the report of such audit in the prescribed form34 duly signed and verified by such accountant and setting forth such particulars as may be prescribed:]
35[Provided also that any amount of donation received by the fund or institution in terms of clause (d) of sub-section (2) of section 80G 36[in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or] which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 37[2004] shall be deemed to be the income of the previous year and shall accordingly be charged to tax:]
38[***]
39[Provided also that where the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (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 institution registered under section 12AA or to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) shall not be treated as application of income to the objects for which such fund or trust or institution or university or educational institution or hospital or other medical institution, as the case may be, is established :
Provided also that where the fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) is notified by the Central Government 40[or is approved by the prescribed authority, as the case may be,] or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), is approved by the prescribed authority and subsequently that Government or the prescribed authority is satisfied that—
(i) such fund or institution or trust or any university or other educational institution or any hospital or other medical institution has not—
(A) applied its income in accordance with the provisions contained in clause (a) of the third proviso; or
(B) invested or deposited its funds in accordance with the provisions contained in clause (b) of the third proviso; or
(ii) the activities of such fund or institution or trust or any university or other educational institution or any hospital or other medical institution—
(A) are not genuine; or
(B) are not being carried out in accordance with all or any of the conditions subject to which it was notified or approved,
it may, at any time after giving a reasonable opportunity of showing cause against the proposed 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 notification or withdrawing the approval to such fund or institution or trust or any university or other educational institution or any hospital or other medical institution and to the Assessing Officer:]
41[Provided also that in case the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in the first proviso makes an application on or after the 1st day of June, 2006 for the purposes of grant of exemption or continuance thereof, such application shall be 42[made on or before the 30th day of September of the relevant assessment year] from which the exemption is sought :]
43[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 :]
44[Provided also that all pending applications, on which no notification has been issued under sub-clause (iv) or sub-clause (v) before the 1st day of June, 2007, shall stand transferred on that day to the prescribed authority and the prescribed authority may proceed with such applications under those sub-clauses from the stage at which they were on that day:]
45[Provided also that the income of a trust or institution referred to in sub-clause (iv) or sub-clause (v) shall be included in its total income of the previous year if the provisions of the first 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 trust or institution has been withdrawn or rescinded;]
The following proviso and the Explanation shall be inserted after the seventeenth proviso to clause (23C) of section 10 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided also that where the fund or institution referred to in sub-clause (iv) or the trust or institution referred to in sub-clause (v) has been notified by the Central Government or approved by the prescribed authority, as the case may be, or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via), has been approved by the prescribed authority, and the notification or the approval is in force for any previous year, then, nothing contained in any other provision of this section [other than clause (1) thereof] shall operate to exclude any income received on behalf of such fund or trust or institution or university or other educational institution or hospital or other medical institution, as the case may be, from the total income of the person in receipt thereof for that previous year.
Explanation.—In this clause, where any income is required to be applied or accumulated, then, for such purpose the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this clause in the same or any other previous year;
46[(23D) 47[48[49[subject to the provisions of Chapter XII-E, any income of]—]
(i) a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder;
(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 Government may, by notification50 in the Official Gazette, specify in this behalf.]
- —For the purposes of this clause,—
(a) the expression “public sector bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary 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 Under-takings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Under-takings) Act, 1980 (40 of 1980) 51[and a bank included in the category “other public sector banks” by the Reserve Bank of India];
(b) the expression “public financial institution” shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956)52;]
53-54[(c) the expression “Securities and Exchange Board of India” shall have the meaning assigned to it in clause (a) of sub-section (1) of section 2 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
55[(23DA) any income of a securitisation trust from the activity of securitisation.
- —For the purposes of this clause,—
(a) “securitisation” shall have the same meaning as assigned to it,—
(i) in clause (r) of sub-regulation (1) of regulation 256 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956); or
(ii) under the guidelines on securitisation of standard assets issued by the Reserve Bank of India;
(b) “securitisation trust” shall have the meaning assigned to it in the Explanation below section 115TC;]
(23E) 57[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
58[(23EA) any income 59[, by way of contributions received from recognised stock exchanges and the members thereof,] of such Investor Protection Fund set up by recognised stock exchanges in India, either jointly or separately, as the Central Government may, by notification60 in the Official Gazette, specify in this behalf:
Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a recognised stock exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax;]
61[(23EB) any income of the Credit Guarantee Fund Trust for Small 62[***] Industries, being a trust created by the Government of India and the Small Industries Development Bank of India established under sub-section (1) of section 3 of the Small Industries Development Bank of India Act, 1989 (39 of 1989), for five previous years relevant to the assessment years beginning on the 1st day of April, 2002 and ending on the 31st day of March, 2007;]
63[(23EC) any income, by way of contributions received from commodity exchanges and the members thereof, 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:
Provided that where any amount standing to the credit of the said Fund and not charged to income-tax during any previous year is shared, either wholly or in part, with a commodity exchange, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall accordingly be chargeable to income-tax.
Explanation.—For the purposes of this clause, “commodity exchange” shall mean a “registered association” as defined in clause (jj) of section 2 of the Forward Contracts (Regulation) Act, 1952 (74 of 1952)64;]
65[(23ED) any income, by way of contributions received from a depository, of such Investor Protection Fund set up in accordance with the regulations by a depository as the Central Government may, by notification in the Official Gazette, specify in this behalf:
Provided that where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, either wholly or in part with a depository, the whole of the amount so shared shall be deemed to be the income of the previous year in which such amount is so shared and shall, accordingly, be chargeable to income-tax.
- —For the purposes of this clause,—
(i) “depository” shall have the same meaning as assigned to it in clause (e) of sub-section (1) of section 266 of the Depositories Act, 1996 (22 of 1996);
(ii) “regulations” means the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Depositories Act, 1996 (22 of 1996);]
67[(23F) any income by way of dividends or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking :
Provided that such venture capital fund or venture capital company is approved for the purposes of this clause by the prescribed autho-rity68 in accordance with the rules69 made in this behalf and satisfies the prescribed conditions :
Provided further that any approval by the prescribed authority shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years, as may be specified in the order of approval :
70[Provided also that nothing contained in this clause shall apply in respect of any investment made after the 31st day of March, 1999.]
71[* * *]
71[* * *]
Explanation.—For the purposes of this clause,—
(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 undertaking in accordance with the prescribed guidelines;
(b) “venture capital company” means such company as has made investments by way of acquiring equity shares of venture capital undertakings in accordance with the prescribed guidelines;
72[(c) “venture capital undertaking” means such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in the business of generation or generation and distribution of electricity or any other form of power or engaged in the business 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 articles or things (including computer software) as may be notified73 by the Central Government in this behalf; and
(d) “infrastructure facility” means a road, highway, bridge, airport, port, rail system, a water supply project, irrigation project, sanitation and sewerage system or any other public facility of a similar nature as may be notified by the Board in this behalf in the Official Gazette and which fulfils the conditions specified in sub-section (4A) of section 80-IA;]
74[(23FA) any income by way of dividends 75[, other than dividends referred to in section 115-O], or long-term capital gains of a venture capital fund or a venture capital company from investments made by way of equity shares in a venture capital undertaking :
Provided that such venture capital fund or venture capital company is approved, for the purposes of this clause, by the Central Government on an application made to it in accordance with the rules76 made in this behalf and which satisfies the prescribed conditions :
Provided further that any approval by the Central Government shall, at any one time, have effect for such assessment year or years, not exceeding three assessment years, as may be specified in the order of approval :
77[Provided also that nothing contained in this clause shall apply in respect of any investment made after the 31st day of March, 2000.]
Explanation.—For the purposes of this clause,—
(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 undertaking in accordance with the prescribed guidelines;
(b) “venture capital company” means such company as has made investments by way of acquiring equity shares of venture capital undertakings in accordance with the prescribed guidelines; and
(c) “venture capital undertaking” means such domestic company whose shares are not listed in a recognised stock exchange in India and which is engaged in the—
(i) business of—
(A) software;
(B) information technology;
(C) production of basic drugs in the pharmaceutical sector;
(D) bio-technology;
(E) agriculture and allied sectors; or
(F) such other sectors as may be notified78 by the Central Government in this behalf; or
(ii) production or manufacture of any article or substance for which patent has been granted to the National Research Laboratory or any other scientific research institution approved by the Department of Science and Technology;]
79[(23FB) any income of a venture capital company or venture capital fund 80[from investment] in a venture capital undertaking.
81[Explanation.—For the purposes of this clause,—
(a) “venture capital company” means a company which—
(A) has been granted a certificate of registration, before the 21st day of May, 2012, as a Venture Capital Fund and is regulated under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 (hereinafter referred to as the Venture Capital Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or
(B) has been granted a certificate of registration as Venture Capital Fund as a sub-category of 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) it is not listed on a recognised stock exchange;
(ii) it has invested not less than two-thirds of its investible funds in unlisted equity shares or equity linked instruments of venture capital undertaking; and
(iii) it has not invested in any venture capital undertaking in which its director or a substantial shareholder (being a beneficial owner of equity shares exceeding ten per cent of its equity share capital) holds, either individually or collectively, equity shares in excess of fifteen per cent of the paid-up equity share capital of such venture capital undertaking;
(b) “venture capital fund” means a fund—
(A) operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), which—
(I) has been granted a certificate of registration, before the 21st day of May, 2012, as a Venture Capital Fund and is regulated under the Venture Capital Funds Regulations; or
(II) has been granted a certificate of registration as Venture Capital Fund as a sub-category of Category I Alternative Investment Fund under the Alternative Investment Funds Regulations and which fulfils the following conditions, namely:—
(i) it has invested not less than two-thirds of its investible funds in unlisted equity shares or equity linked instruments of venture capital undertaking;
(ii) it has not invested in any venture capital undertaking in which its trustee or the settler holds, either individually or collectively, equity shares in excess of fifteen per cent of the paid-up equity share capital of such venture capital undertaking; and
(iii) the units, if any, issued by it are not listed in any recognised stock exchange; or
(B) operating as a venture capital scheme made by the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);
(c) “venture capital undertaking” means—
(i) a venture capital undertaking as defined in clause (n) of regulation 2 of the Venture Capital Funds Regulations82; or
(ii) a venture capital undertaking as defined in clause (aa) of sub-regulation (1) of regulation 2 of the Alternative Investment Funds Regulations82;]
83[***]
The following clauses (23FC) and (23FD) shall be inserted after clause (23FB) of section 10 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(23FC) any income of a business trust by way of interest received or receivable from a special purpose vehicle.
Explanation.—For the purposes of this clause, the expression “special purpose vehicle” means an Indian company in which the business trust holds controlling interest and any specific percentage of shareholding or interest, as may be required by the regulations under which such trust is granted registration;
(23FD) any distributed income, referred to in section 115UA, received by a unit holder from the business trust, not being that proportion of the income which is of the same nature as the income referred to in clause (23FC);
(23G) 84[Omitted by the Finance Act, 2006, w.e.f. 1-4-2007;]
85[86(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 between workmen and workmen;
(b) an association of registered unions referred to in sub-clause (a);]
(25) (i) interest on securities which are held by, or are the property of, any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies, and any capital gains of the fund arising from the sale, exchange or transfer of such securities;
(ii) any income received by the trustees on behalf of a recognised provident fund;
(iii) any income received by the trustees on behalf of an approved superannuation fund;
87[(iv) any income received by the trustees on behalf of an approved gratuity fund;]
88[(v) any income received—
(a) by the Board of Trustees constituted under the Coal Mines Provident Funds and Miscellaneous Provisions Act, 1948 (46 of 1948), on behalf of the Deposit-linked Insurance Fund established under section 3G of that Act; or
(b) by the Board of Trustees constituted under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), on behalf of the Deposit-linked Insurance Fund established under section 6C of that Act;]
89[(25A) any income of the Employees’ State Insurance Fund set up under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948);]
90[(26) 91in the case of a member of a 92Scheduled Tribe as defined in clause (25) of article 366 of the Constitution, residing93 in any area specified93 in Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the 94[States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura] or in the areas covered by notification No. TAD/R/35/50/109, dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-paragraph (3) of the said paragraph 20 [as it stood immediately before the commencement of the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971)] 95[or in the Ladakh region of the State of Jammu and Kashmir], any income which accrues or arises to him,—
(a) from any source in the areas 96[or States aforesaid], or
(b) by way of dividend or interest on securities;]
97[(26A) any income accruing or arising to any person 98[* * *] from any source in the district of Ladakh or outside India in any previous year relevant to any assessment year commencing before the 1st day of April, 99[1989], where such person is resident in the said district in that previous year :
Provided that this clause shall not apply in the case of any such person unless he was resident in that district in the previous year relevant to the assessment year commencing on the 1st day of April, 1962.
1[Explanation 1].—For the purposes of this clause, a person shall be deemed to be resident in the district of Ladakh if he fulfils the requirements of sub-section (1)2 or sub-section (2) or sub-section (3) or sub-section (4) of section 6, as the case may be, subject to the modifications that—
(i) references in those sub-sections to India shall be construed as references to the said district; and
(ii) in clause (i) of sub-section (3), reference to Indian company shall be construed as reference to a company formed and registered under any law for the time being in force in the State of Jammu and Kashmir and having its registered office in that district in that year.]
3[Explanation 2.—In this clause, references to the district of Ladakh shall be construed as references to the areas comprised in the said district on the 30th day of June, 1979;]
(26AA) 4[* * *]
5[(26AAA) 6in case of an individual, being a Sikkimese, any income which accrues or arises to him—
(a) from any source in the State of Sikkim; or
(b) by way of dividend or interest on securities:
Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individual who is not a Sikkimese.
Explanation.—For the purposes of this clause, “Sikkimese” shall mean—
(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 “Register of Sikkim Subjects” ), immediately before the 26th day of April, 1975; or
(ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No. 26030/36/90-I.C.I., dated the 7th August, 1990 and Order of even number dated the 8th April, 1991; or
(iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual’s father or husband or paternal grand-father or brother from the same father has been recorded in that register;]
7-8[(26AAB) any income of an agricultural produce market committee or board constituted under any law for the time being in force for the purpose of regulating the marketing of agricultural produce;]
9[(26B) any income of a corporation established by a Central, State or Provincial Act or of any other body, institution or association (being a body, institution or association wholly financed by Government) where such corporation or other body or institution or association has been established or formed for promoting the interests of the 10[members of the Scheduled Castes or the Scheduled Tribes or backward classes or of any two or all of them].
11[Explanation.—For the purposes of this clause,—
(a) 12“Scheduled Castes” and 13“Scheduled Tribes” shall have the meanings respectively assigned to them in clauses (24) and (25) of article 366 of the Constitution;
(b) “backward classes” means such classes of citizens, other than the Scheduled Castes and the Scheduled Tribes, as may be notified—
(i) by the Central Government; or
(ii) by any State Government,
as the case may be, from time to time;]
14[(26BB) any income of a corporation established by the Central Government or any State Government for promoting the interests of the members of a minority community.
- —For the purposes of this clause, “minority community” means a community notified15 as such by the Central Government in the Official Gazette in this behalf;]
16[(26BBB) any income of a corporation established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen being the citizens of India.
Explanation.—For the purposes of this clause, “ex-serviceman” means a person who has served in any rank, whether as combatant or non-combatant, in the armed forces of the Union or armed forces of the Indian States before the commencement of the Constitution (but excluding the Assam Rifles, 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 misconduct or inefficiency, and in the case of a deceased or incapacitated ex-serviceman includes his wife, children, father, mother, minor brother, widowed daughter and widowed sister, wholly dependant upon such ex-serviceman immediately before his death or incapacitation;]
17[(27) any income of a co-operative society formed for promoting the interests of the members of either the Scheduled Castes or Scheduled Tribes or both referred to in clause (26B) :
Provided that the membership of the co-operative society consists of only other co-operative societies formed for similar purposes and the finances of the society are provided by the Government and such other societies;]
(28) 18[* * *]
(29) 19[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]
20[(29A) any income accruing or arising to—
(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, 1962 or the previous year in which such Board was constituted, whichever is later;
(b) the Rubber Board constituted under sub-section (1) of section 4 of the Rubber Board Act, 1947 (24 of 1947) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the previous year in which such Board was constituted, whichever is later;
(c) the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1962 or the previous year in which such Board was constituted, whichever is later;
(d) the Tobacco Board constituted under the Tobacco Board Act, 1975 (4 of 1975) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1975 or the previous year in which such Board was constituted, whichever is later;
(e) the Marine Products Export Development Authority established under section 4 of the Marine Products Export Development Authority Act, 1972 (13 of 1972) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1972 or the previous year in which such Authority was constituted, whichever is later;
(f) the Agricultural and Processed Food Products Export Development Authority established under section 4 of the Agricultural and Processed Food Products Export Development Act, 1985 (2 of 1986) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1985 or the previous year in which such Authority was constituted, whichever is later;
(g) the Spices Board constituted under sub-section (1) of section 3 of the Spices Board Act, 1986 (10 of 1986) in any previous year relevant to any assessment year commencing on or after the 1st day of April, 1986 or the previous year in which such Board was constituted, whichever is later;]
21[(h) the Coir Board established under section 4 of the Coir Industry Act, 1953 (45 of 1953);]
22[(30) 23in the case of an assessee who carries on the business of growing and manufacturing tea in India, the amount of any subsidy received from or through the Tea Board under any such scheme24 for replantation or replacement of tea bushes 25[or for rejuvenation or consolidation of areas used for cultivation of tea] as the Central Government may, by notification in the Official Gazette, specify:
Provided that the assessee furnishes to the 26[Assessing] Officer, along with his return of income27 for the assessment year concerned or within such further time as the 26[Assessing] Officer may allow, a certificate from the Tea Board as to the amount of such subsidy paid to the assessee during the previous year.
- —In this clause, “Tea Board” means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953);]
28[(31) in the case of an assessee who carries on the business of growing and manufacturing rubber, coffee, cardamom or such other commodity in India, as the Central Government may, by notification in the 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 consolidation of areas used for cultivation of rubber, coffee, cardamom or such other commodity as the Central Government may, by notification in the Official Gazette, specify:
Provided that the assessee furnishes to the Assessing Officer, along with his return of income29 for the assessment year concerned or within such further time as the Assessing Officer may allow, a certificate from the concerned Board, as to the amount of such subsidy paid to the assessee during the previous year.
- —In this clause, “concerned Board” means,—
(i) in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act, 1947 (24 of 1947),
(ii) in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942),
(iii) in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board Act, 1986 (10 of 1986),
(iv) in relation to any other commodity specified under this clause, any Board or other authority established under any law for the time being in force which the Central Government may, by notification in the Official Gazette, specify in this behalf;]
30[(32) in the case of an assessee referred to in sub-section (1A) of section 64, any income includible in his total income under that sub-section, to the extent such income does not exceed one thousand five hundred rupees in respect of each minor child whose income is so includible;]
31[(33) any income arising from the transfer of a capital asset, being a unit of the Unit Scheme, 1964 referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)32 and where the transfer of such asset takes place on or after the 1st day of April, 2002;]
33[(34) any income by way of dividends referred to in section 115-O;
34[***]
35[(34A) any income arising to an assessee, being a shareholder, on account of buy back of shares (not being listed on a recognised stock exchange) by the company as referred to in section 115QA;]
(35) any income by way of,—
(a) income received in respect of the units of a Mutual Fund specified under clause (23D); or
(b) income received in respect of units from the Administrator of the specified undertaking; or
(c) income received in respect of units from the specified company:
Provided that this clause shall not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case may be.
Explanation.—For the purposes of this clause,—
(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)36;
(b) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002)36;
37[(35A) any income by way of distributed income referred to in section 115TA received from a securitisation trust by any person being an investor of the said trust.
- —For the purposes of this clause, the expressions “investor” and “securitisation trust” shall have the meanings respectively assigned to them in the Explanation below section 115TC;]
(36) any income arising from the transfer of a long-term capital asset, being an eligible equity share in a company purchased on or after the 1st day of March, 2003 and before the 1st day of March, 2004 and held for a period of twelve months or more.
Explanation.—For the purposes of this clause, “eligible equity share” means,—
(i) any equity share in a company being a constituent of BSE-500 Index of the Stock Exchange, Mumbai as on the 1st day of March, 2003 and the transactions of purchase and sale of such equity share are entered into on a recognised stock exchange in India;
(ii) any equity share in a company allotted through a public issue on or after the 1st day of March, 2003 and listed in a recognised stock exchange in India before the 1st day of March, 2004 and the transaction of sale of such share is entered into on a recognised stock exchange in India;]
38[(37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head “Capital gains” arising from the transfer of agricultural land, where—
(i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2;
(ii) such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his;
(iii) such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India;
(iv) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004.
- —For the purposes of this clause, the expression “compensation or consideration” includes the compensation or con-sideration enhanced or further enhanced by any court, Tribunal or other authority;
(38) any income arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund 38a[or a unit of a business trust] where—
(a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force39; and
(b) such transaction is chargeable to securities transaction tax under that Chapter :
40[Provided that the income by way of long-term capital gain of a company shall be taken into account in computing the book profit and income-tax payable under section 115JB.]
The following proviso shall be inserted after the existing proviso to clause (38) of section 10 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided further that the provisions of this clause shall not apply in respect of any income arising from transfer of units of a business trust which were acquired in consideration of a transfer referred to in clause (xvii) of section 47.
Explanation.—For the purposes of this clause, “equity oriented fund” means a fund—
(i) where the investible funds are invested by way of equity shares in domestic companies to the extent of more than 41[sixty-five] per cent of the total proceeds of such fund; and
(ii) which has been set up under a scheme of a Mutual Fund specified under clause (23D) :
Provided that the percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures;]
42[(39) any specified income, arising from any international sporting event held in India, to the person or persons notified43 by the Central Government in the Official Gazette, if such international sporting event—
(a) is approved by the international body regulating the international sport relating to such event;
(b) has participation by more than two countries;
(c) is notified43 by the Central Government in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, “the specified income” means the income, of the nature and to the extent, arising from the international sporting event, which the Central Government may notify43 in this behalf;
(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 reconstruction or revival of an existing business of power generation:
Provided that the provisions of this clause shall apply if reconstruction or revival of any existing business of power generation is by way of transfer of such business to the Indian company notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;
(41) any income arising from transfer of a capital asset, being an asset of an undertaking engaged in the business of generation or transmission or distribution of power where such transfer is effected on or before the 31st day of March, 2006, to the Indian company notified under sub-clause (a) of clause (v) of sub-section (4) of section 80-IA;]
44[(42) any specified income arising to a body or authority which—
(a) has been established or constituted or appointed under a treaty or an agreement entered into by the Central Government with two or more countries or a convention signed by the Central Government;
(b) is established or constituted or appointed not for the purposes of profit;
(c) is notified by the Central Government in the Official Gazette45 for the purposes of this clause.
Explanation.—For the purposes of this clause, “specified income” means the income, of the nature and to the extent, arising to the body or authority referred to in this clause, which the Central Government may notify45 in this behalf;]
46[(43) any amount received by an individual as a loan, either in lump sum or in instalment, in a transaction of reverse mortgage referred to in clause (xvi) of section 47;]
47[(44) any income received by any person for, or on behalf of, the New Pension System Trust established on the 27th day of February, 2008 under the provisions of the Indian Trusts Act, 1882 (2 of 1882);]
48[(45) any allowance or perquisite, as may be notified49 by the Central Government in the Official Gazette in this behalf, paid to the Chairman or a retired Chairman or any other member or retired member of the Union Public Service Commission;]
50[(46) any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called) which—
(a) has been established or constituted by or under a Central, State or Provincial Act, or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;
(b) is not engaged in any commercial activity; and
(c) is notified51 by the Central Government in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, “specified income” means the income, of the nature and to the extent arising to a body or authority or Board or Trust or Commission (by whatever name called) referred to in this clause, which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(47) any income of an infrastructure debt fund, set up in accordance with the guidelines as may be prescribed,52 which is notified by the Central Government in the Official Gazette for the purposes of this clause;]
53[(48) any income received in India in Indian currency by a foreign company on account of 54[sale of crude oil, any other goods or rendering of services, as may be notified by the Central Government in this behalf, to any person] in India:
Provided that—
(i) receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government;
(ii) having regard to the national interest, the foreign company and the agreement or arrangement are notified55 by the Central Government in this behalf; and
(iii) the foreign company is not engaged in any activity, other than receipt of such income, in India;]
56[(49) any income of the National Financial Holdings Company Limited, being a company set up by the Central Government, of any previous year relevant to any assessment year commencing on or before the 1st day of April, 2014.]
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Section 10A: 57[Special provision in respect of newly established undertakings in free trade zone, etc.58
- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export59 of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture59 or produce such articles or things or computer software, as the case may be, shall be allowed from the total income59 of the assessee :
Provided that where in computing the total income59 of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to deduction referred to in this sub-section only for the unexpired period of the aforesaid ten consecutive assessment years :
Provided further that where an undertaking initially located in any free trade zone or export processing zone is subsequently located in a special economic zone by reason of conversion of such free trade zone or export processing zone into a special economic zone, the period of ten consecutive assessment years referred to in this sub-section shall be reckoned from the assessment year relevant to the previous year in which the 60[undertaking began to manufacture or produce such articles or things or computer software] in such free trade zone or export processing zone :
61[Provided also that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software :]
Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 62[2012] and subsequent years.
63[(1A) Notwithstanding anything contained in sub-section (1), the deduction, in computing the total income of an undertaking, which begins to manufacture or produce articles or things or computer software during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2003, in any special economic zone, shall be,—
(i) hundred per cent of profits and gains derived from the export of such articles or things or computer software for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, and thereafter, fifty per cent of such profits and gains for further two consecutive assessment years, and thereafter;
(ii) for the next three consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the “Special Economic Zone Re-investment Allowance Reserve Account” ) to be created and utilised for the purposes of the business of the assessee in the manner laid down in sub-section (1B) :
64[Provided that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139.]
(1B) The deduction under clause (ii) of sub-section (1A) shall be allowed only if the following conditions are fulfilled, namely:—
(a) the amount credited to the Special Economic Zone Re-investment Allowance Reserve Account is to be utilised—
(i) for the purposes of acquiring new machinery or plant which is first put to use before the expiry of a period of three years next following the previous year in which the reserve was created; and
(ii) until the acquisition of new machinery or plant as aforesaid, for the purposes of the business of the undertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India;
(b) the particulars, as may be prescribed65 in this behalf, have been furnished by the assessee in respect of new machinery or plant along with the return of income for the assessment year relevant to the previous year in which such plant or machinery was first put to use.
(1C) Where any amount credited to the Special Economic Zone Re-investment Allowance Reserve Account under clause (ii) of sub-section (1A),—
(a) has been utilised for any purpose other than those referred to in sub-section (1B), the amount so utilised; or
(b) has not been utilised before the expiry of the period specified in sub-clause (i) of clause (a) of sub-section (1B), the amount not so utilised,
shall be deemed to be the profits,—
(i) in a case referred to in clause (a), in the year in which the amount was so utilised; or
(ii) in a case referred to in clause (b), in the year immediately following the period of three years specified in sub-clause (i) of clause (a) of sub-section (1B),
and shall be charged to tax accordingly.]
(2) This section applies to any undertaking which fulfils all the following conditions, namely :—
(i) it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year—
(a) commencing on or after the 1st day of April, 1981, in any free trade zone; or
(b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park, or, as the case may be, software technology park;
(c) commencing on or after the 1st day of April, 2001 in any special economic zone;
(ii) it is not formed by the splitting up66, or the reconstruction66, of a business already in existence :
Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertakings as is referred to in section 33B, in the circumstances and within the period specified in that section;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.
(3) This section applies to the undertaking, if the sale proceeds66 of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation 1.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
Explanation 2.—The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.
67[(4) For the purposes of 68[sub-sections (1) and (1A)], the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking.]
(5) The deduction under 68[this section] shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form69, alongwith the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,—
(i) section 32, section 32A, section 33, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years 70[ending before the 1st day of April, 2001], in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and accordingly sub-section (2) of section 32, clause (ii) of sub-section (3) of section 32A, clause (ii) of sub-section (2) of section 33, sub-section (4) of section 35 or the second proviso to clause (ix) of sub-section (1) of section 36, as the case may be, shall not apply in relation to any such allowance or deduction;
(ii) no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years 70[ending before the 1st day of April, 2001];
(iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB in relation to the profits and gains of the undertaking; and
(iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year.
(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
71[(7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger,—
(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.]
72[(7B) The provisions of this section shall not apply to any undertaking, being a Unit referred to in clause (zc) of section 273 of the Special Economic Zones Act, 2005, which has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year commencing on or after the 1st day of April, 2006 in any Special Economic Zone.]
(8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years.
(9) 74[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
(9A) 75[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
Explanation 1.— 76[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
Explanation 2.—For the purposes of this section,—
(i) “computer software” 77 means—
(a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or
(b) any customized electronic data or any product or service of similar nature, as may be notified78 by the Board,
which is transmitted or exported from India to any place outside India by any means;
(ii) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of 79[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder or any other corresponding law for the time being in force;
(iii) “electronic hardware technology park” means any park set up in accordance with the Electronic Hardware Technology Park (EHTP) Scheme notified80 by the Government of India in the Ministry of Commerce and Industry;
(iv) “export turnover” means the consideration in respect of export 81[by the undertaking] of articles or things or computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;
(v) “free trade zone” means the Kandla Free Trade Zone and the Santacruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette,82 specify for the purposes of this section;
(vi) “relevant assessment year” means any assessment year falling within a period of ten consecutive assessment years referred to in this section;
(vii) “software technology park” means any park set up in accordance with the Software Technology Park Scheme notified83 by the Government of India in the Ministry of Commerce and Industry;
(viii) “special economic zone” means a zone which the Central Government may, by notification in the Official Gazette, specify as a special economic zone for the purposes of this section.]
84[Explanation 3.—For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]
85[Explanation 4.—For the purposes of this section, “manufacture or produce” shall include the cutting and polishing of precious and semi-precious stones.]
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Section 10AA: 86[Special provisions in respect of newly established Units in Special Economic Zones.87
- (1) Subject to the provisions of this section, in computing the total income of an assessee, being an entrepreneur as referred to in clause (j) of section 288 of the Special Economic Zones Act, 2005, from his Unit, who begins to manufacture or produce articles or things or provide any services during the previous year relevant to any assessment year commencing on or after the 1st day of April, 200689, a deduction of—
(i) hundred per cent of profits and gains derived from the export, of such articles or things or from services for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the Unit begins to manufacture or produce such articles or things or provide services, as the case may be, and fifty per cent of such profits and gains for further five assessment years and thereafter;
(ii) for the next five consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the “Special Economic Zone Re-investment Reserve Account” ) to be created and utilized for the purposes of the business of the assessee in the manner laid down in sub-section (2).
(2) The deduction under clause (ii) of sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :—
(a) the amount credited to the Special Economic Zone Re-investment Reserve Account is to be utilised—
(i) for the purposes of acquiring machinery or plant which is first put to use before the expiry of a period of three years following the previous year in which the reserve was created; and
(ii) until the acquisition of the machinery or plant as aforesaid, for the purposes of the business of the undertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India;
(b) the particulars, as may be specified by the Central Board of Direct Taxes in this behalf, under clause (b) of sub-section (1B) of section 10A have been furnished by the assessee in respect of machinery or plant along with the return of income90 for the assessment year relevant to the previous year in which such plant or machinery was first put to use.
(3) Where any amount credited to the Special Economic Zone Re-investment Reserve Account under clause (ii) of sub-section (1),—
(a) has been utilised for any purpose other than those referred to in sub-section (2), the amount so utilised; or
(b) has not been utilised before the expiry of the period specified in sub-clause (i) of clause (a) of sub-section (2), the amount not so utilised,
shall be deemed to be the profits,—
(i) in a case referred to in clause (a), in the year in which the amount was so utilised; or
(ii) in a case referred to in clause (b), in the year immediately following the period of three years specified in sub-clause (i) of clause (a) of sub-section (2),
and shall be charged to tax accordingly :
Provided that where in computing the total income of the Unit for any assessment year, its profits and gains had not been included by application of the provisions of sub-section (7B) of section 10A, the undertaking, being the Unit shall be entitled to deduction referred to in this sub-section only for the unexpired period of ten consecutive assessment years and thereafter it shall be eligible for deduction from income as provided in clause (ii) of sub-section (1).
- —For the removal of doubts, it is hereby declared that an undertaking, being the Unit, which had already availed, before the commencement of the Special Economic Zones Act, 2005, the deductions referred to in section 10A for ten consecutive assessment years, such Unit shall not be eligible for deduction from income under this section :
Provided further that where a Unit initially located in any free trade zone or export processing zone is subsequently located in a Special Economic Zone by reason of conversion of such free trade zone or export processing zone into a Special Economic Zone, the period of ten consecutive assessment years referred to above shall be reckoned from the assessment year relevant to the previous year in which the Unit began to manufacture, or produce or process such articles or things or services in such free trade zone or export processing zone :
Provided also that where a Unit initially located in any free trade zone or export processing zone is subsequently located in a Special Economic Zone by reason of conversion of such free trade zone or export processing zone into a Special Economic Zone and has completed the period of ten consecutive assessment years referred to above, it shall not be eligible for deduction from income as provided in clause (ii) of sub-section (1) with effect from the 1st day of April, 2006.
91[(4) This section applies to any undertaking, being the Unit, which fulfils all the following conditions, namely:—
(i) it has begun or begins to manufacture or produce articles or things or provide services during the previous year relevant to the assessment year commencing on or after the 1st day of April, 2006 in any Special Economic Zone;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence:
Provided that this condition shall not apply in respect of any undertaking, being the Unit, which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(iii) it is not formed by the transfer to a new business, of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanations 1 and 2 to sub-section (3) of sec-tion 80-IA shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.]
(5) Where any undertaking being the Unit which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another undertaking, being the Unit in a scheme of amalgamation or demerger,—
(a) no deduction shall be admissible under this section to the amalgamating or the demerged Unit, being the company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as they would have applied to the amalgamating or the demerged Unit being the company as if the amalgamation or demerger had not taken place.
(6) Loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the undertaking, being the Unit shall be allowed to be carried forward or set off.
(7) For the purposes of sub-section (1), the profits derived from the export of articles or things or services (including computer software) shall be the amount which bears to the profits of the business of the undertaking, being the Unit, the same proportion as the export turnover in respect of such articles or things or services bears to the total turnover of the business carried on 92[by the under-taking] :
93[Provided that the provisions of this sub-section [as amended by section 6 of the Finance (No. 2) Act, 2009 (33 of 2009)] shall have effect for the assessment year beginning on the 1st day of April, 2006 and subsequent assessment years.]
(8) The provisions of sub-sections (5)93a and (6) of section 10A shall apply to the articles or things or services referred to in sub-section (1) as if—
(a) for the figures, letters and word “1st April, 2001”, the figures, letters and word “1st April, 2006” had been substituted;
(b) for the word “undertaking”, the words “undertaking, being the Unit” had been substituted.
(9) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
The following sub-section (10) shall be inserted after sub-section (9) of section 10AA by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(10) Where a deduction under this section is claimed and allowed in respect of profits of any of the specified business, referred to in clause (c) of sub-section (8) of section 35AD, for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.
Explanation 1.—For the purposes of this section,—
(i) “export turnover” means the consideration in respect of export by the undertaking, being the Unit of articles or things or services received in, or brought into, India by the assessee but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India or expenses, if any, incurred in foreign exchange in rendering of services (including computer software) outside India;
(ii) “export in relation to the Special Economic Zones” means taking goods or providing services out of India from a Special Economic Zone by land, sea, air, or by any other mode, whether physical or otherwise;
(iii) “manufacture” shall have the same meaning as assigned to it in clause (r) of section 2 of the Special Economic Zones Act, 200594;
(iv) “relevant assessment year” means any assessment year falling within a period of fifteen consecutive assessment years referred to in this section;
(v) “Special Economic Zone” and “Unit” shall have the same meanings as assigned to them under clauses (za) and (zc)94 of section 2 of the Special Economic Zones Act, 2005.
Explanation 2.—For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]
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Section 10B: 95[Special provisions in respect of newly established hundred per cent export-oriented undertakings96.
- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee :
Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this sub-section only for the unexpired period of aforesaid ten consecutive assessment years :
97[Provided 98[further] that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software:]
Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 99[2012] and subsequent years :
1[Provided also that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139.]
(2) This section applies to any undertaking which fulfils all the following conditions, namely :—
(i) it manufactures or produces any articles or things or computer software;
(ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section ;
(iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to subsection (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.
(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation 1.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
Explanation 2.—The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.
2[(4) For the purposes of sub-section (1), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking.]
(5) The deduction under sub-section (1) shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form3, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,—
(i) section 32, section 32A, section 33, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years 4[ending before the 1st day of April, 2001], in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and accordingly sub-section (2) of section 32, clause (ii) of sub-section (3) of section 32A, clause (ii) of sub-section (2) of section 33, sub-section (4) of section 35 or the second proviso to clause (ix) of sub-section (1) of section 36, as the case may be, shall not apply in relation to any such allowance or deduction;
(ii) no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set-off where such loss relates to any of the relevant assessment years 5[ending before the 1st day of April, 2001];
(iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB in relation to the profits and gains of the undertaking; and
(iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year.
(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
6[(7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger—
(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and
(b) the provisions of this section shall, as far as may be, apply to the amalgamated or resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or the demerger had not taken place.]
(8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment year.
(9) 7[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
(9A) 8[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
Explanation 1.— 9[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]
Explanation 2.—For the purposes of this section,—
(i) “computer software” means—
(a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or
(b) any customized electronic data or any product or service of similar nature as may be notified10 by the Board,
which is transmitted or exported from India to any place outside India by any means;
(ii) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of 11[the Foreign Exchange Management Act, 1999 (42 of 1999)], and any rules made thereunder or any other corresponding law for the time being in force;
(iii) “export turnover” means the consideration in respect of export 12[by the undertaking] of articles or things or computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;
(iv) “hundred per cent export-oriented undertaking” means an undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 1413 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act;
(v) “relevant assessment years” means any assessment years falling within a period of ten consecutive assessment years, referred to in this section.]
14[Explanation 3.—For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]
15[Explanation 4.—For the purposes of this section, “manufacture or produce” shall include the cutting and polishing of precious and semi-precious stones.]
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Section 10BA: 16[Special provisions in respect of export of certain articles or things.16a
- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee :
Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section :
Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
(2) This section applies to any undertaking which fulfils the following conditions, namely :—
(a) it manufactures or produces the eligible articles or things without the use of imported raw materials;
(b) it is not formed by the splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(c) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of this clause as they apply for the purposes of clause (ii) of sub-section (2) of that section;
(d) ninety per cent or more of its sales during the previous year relevant to the assessment year are by way of exports of the eligible articles or things;
(e) it employs twenty or more workers during the previous year in the process of manufacture or production.
(3) This section applies to the undertaking, if the sale proceeds of the eligible articles or things exported out of India are received in or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
(4) For the purposes of sub-section (1), the profits derived from export out of India of the eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things bears to the total turnover of the business carried on by the undertaking.
(5) The deduction under sub-section (1) shall not be admissible, unless the assessee furnishes in the prescribed form17, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, where a deduction is allowed under this section in computing the total income of the assessee, no deduction shall be allowed under any other section in respect of its export profits.
(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force;
(b) “eligible articles or things” means all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material;
(c) “export turnover” means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India;
(d) “export out of India” shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station18 as defined in the Customs Act, 1962 (52 of 1962).]
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Section 10BA: 16[Special provisions in respect of export of certain articles or things.16a
- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee :
Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section :
Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
(2) This section applies to any undertaking which fulfils the following conditions, namely :—
(a) it manufactures or produces the eligible articles or things without the use of imported raw materials;
(b) it is not formed by the splitting up, or the reconstruction, of a business already in existence :
Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section;
(c) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of this clause as they apply for the purposes of clause (ii) of sub-section (2) of that section;
(d) ninety per cent or more of its sales during the previous year relevant to the assessment year are by way of exports of the eligible articles or things;
(e) it employs twenty or more workers during the previous year in the process of manufacture or production.
(3) This section applies to the undertaking, if the sale proceeds of the eligible articles or things exported out of India are received in or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.
Explanation.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.
(4) For the purposes of sub-section (1), the profits derived from export out of India of the eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things bears to the total turnover of the business carried on by the undertaking.
(5) The deduction under sub-section (1) shall not be admissible, unless the assessee furnishes in the prescribed form17, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.
(6) Notwithstanding anything contained in any other provision of this Act, where a deduction is allowed under this section in computing the total income of the assessee, no deduction shall be allowed under any other section in respect of its export profits.
(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.
Explanation.—For the purposes of this section,—
(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force;
(b) “eligible articles or things” means all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material;
(c) “export turnover” means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things outside India;
(d) “export out of India” shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station18 as defined in the Customs Act, 1962 (52 of 1962).]
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Section 10C: 20[Special provision in respect of certain industrial undertakings in North-Eastern Region.
- (1) Subject to the provisions of this section, any profits and gains derived by an assessee from an industrial undertaking, which has begun or begins to manufacture or produce any article or thing on or after the 1st day of April, 1998 in any Integrated Infrastructure Development Centre or Industrial Growth Centre located in the North-Eastern Region (hereafter in this section referred to as the industrial undertaking) shall not be included in the total income of the assessee.
(2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :—
(i) it is not formed by the splitting up, or the reconstruction of, a business already in existence :
Provided that this condition shall not apply in respect of any indus-trial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section ;
(ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.
(3) The profits and gains referred to in sub-section (1) shall not be included in the total income of the assessee in respect of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things.
(4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of any previous year relevant to any subsequent assessment year,—
(i) section 32, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if deduction referred to therein and relating to or allowable for any of the relevant assessment years, in relation to any building, machinery, plant or furniture used for the purposes of the business of the industrial undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and, accordingly, sub-section (2) of section 32, sub-section (4) of section 35 or the second proviso to clause (ix) of sub-section (1) of section 36, as the case may be, shall not apply in relation to any such deduction;
(ii) no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the industrial undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years;
(iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB or section 80JJA in relation to the profits and gains of the industrial undertakings; and
(iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the industrial undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment years.
(5) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the industrial undertaking referred to in this section as they apply for the purposes of the industrial undertaking referred to in section 80-IA or section 80-IB, as the case may be.
(6) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee before the due date for furnishing the return of his income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him in any of the relevant assessment years :
21[Provided that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2004 and subsequent years.]
Explanation.—For the purposes of this section,—
(i) “Integrated Infrastructure Development Centre” means such centres located in the States of the North-Eastern Region, which the Central Government, may, by notification in the Official Gazette, specify22 for the purposes of this section;
(ii) “Industrial Growth Centre” means such centres located in the States of the North-Eastern Region, which the Central Government may, by notification in the Official Gazette, specify22 for the purposes of this section;
(iii) “North-Eastern Region” means the region comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura;
(iv) “relevant assessment years” means the ten consecutive years beginning with the year in which the industrial undertaking begins to manufacture or produce articles or things.]
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Section 11: 23Income24 from property held for charitable or religious purposes.
- 25 (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income—
26[(a) income derived from property24 held under trust wholly24 for charitable or religious purposes, to the extent to which such income24 is applied24 to such purposes in India; and, where any such income24 is 24accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart27 is not in excess of 28[fifteen] per cent of the income from such property;
(b) income derived from property held under trust in part27 only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income27 is applied to such purposes in India; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of 28[fifteen] per cent of the income from such property;
(c) income 29[derived] from property held under trust—
(i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and
(ii) for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India:
Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income;
30[(d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus31 of the trust or institution.]
32[Explanation.—For the purposes of clauses (a) and (b),—
(1) in computing the 33[fifteen] per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in section 12 shall be deemed to be part of the income;
(2) if, in the previous year, the income applied to charitable or religious purposes in India falls short of 34[eighty-five] per cent of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount—
(i) for the reason that the whole or any part of the income has not been received during that year, or
(ii) for any other reason,
then—
(a) in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount, and
(b) in the case referred to in sub-clause (ii), so much of the income applied to such purposes in India during the previous year immediately following the previous year in which the income was derived as does not exceed the said amount,
may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) 35[* * *] of section 139 36[* * *] for furnishing the return of income) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived.]
37[(1A) For the purposes of sub-section (1),—
(a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:—
(i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of such capital gain;
(ii) where only a part of the net consideration is utilised for acquiring the new capital asset, so much of such capital gain as is equal to the amount, if any, by which the amount so utilised exceeds the cost of the transferred asset;
(b) where a capital asset, being property held under trust in part only for such purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the appropriate fraction of the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:—
(i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of the appropriate fraction of such capital gain;
(ii) in any other case, so much of the appropriate fraction of the capital gain as is equal to the amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new asset exceeds the appropriate fraction of the cost of the transferred asset.
- —In this sub-section,—
(i) “appropriate fraction” means the fraction which represents the extent to which the income derived from the capital asset transferred was immediately before such transfer applicable to charitable or religious purposes;
(ii) “cost of the transferred asset” means the aggregate of the cost of acquisition (as ascertained for the purposes of sections 48 and 49) of the capital asset which is the subject of the transfer and the cost of any improvement thereto within the meaning assigned to that expression in sub-clause (b) of clause (1) of section 55;
(iii) “net consideration” means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.]
38[(1B) Where any income in respect of which an option is exercised under clause (2) of the Explanation to sub-section (1) is not applied to charitable or religious purposes in India during the period referred to in sub-clause (a) or, as the case may be, sub-clause (b), of the said clause, then, such income shall be deemed to be the income of the person in receipt thereof—
(a) in the case referred to in sub-clause (i) of the said clause, of the previous year immediately following the previous year in which the income was received; or
(b) in the case referred to in sub-clause (ii) of the said clause, of the previous year immediately following the previous year in which the income was derived.]
39[(2) 40[Where 41[eighty-five] per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely:—]
(a) such person specifies, by notice in writing given to the 42[Assessing] Officer in the prescribed43 manner44, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years;
45[(b) the money so accumulated46 or set apart is invested or deposited in the forms or modes specified in sub-section (5)]:]
47[Provided that in computing the period of ten years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded:]
48[Provided further that in respect of any income accumulated or set apart on or after the 1st day of April, 2001, the provisions of this sub-section shall have effect as if for the words “ten years” at both the places where they occur, the words “five years” had been substituted.]
49[Explanation.—Any amount credited or paid, out of income referred to in clause (a) or clause (b) of sub-section (1), read with the Explanation to that sub-section, which is not applied, but is accumulated or set apart, to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter.]
50[(3) Any income referred to in sub-section (2) which—
(a) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or
51[(b) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5), or]
(c) is not utilised52 for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of that sub-section or in the year immediately following the expiry thereof,
53[(d) is credited or paid to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10,]
shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be so accumulated or set apart or ceases to remain so invested or deposited or 53[credited or paid or], as the case may be, of the previous year immediately following the expiry of the period aforesaid.]
54[(3A) Notwithstanding anything contained in sub-section (3), where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited in accordance with the provisions of clause (b) of sub-section (2) cannot be applied for the purpose for which it was accumulated or set apart, the 55[Assessing] Officer may, on an application made to him in this behalf, allow such person to apply such income for such other charitable or religious purpose in India as is specified in the application by such person and as is in conformity with the objects of the trust; and thereupon the provisions of sub-section (3) shall apply as if the purpose specified by such person in the application under this sub-section were a purpose specified in the notice given to the 55[Assessing] Officer under clause (a) of sub-section (2):]
56[Provided that the Assessing Officer shall not allow application of such income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of section 11:]
57[Provided further that in case the trust or institution, which has invested or deposited its income in accordance with the provisions of clause (b) of sub-section (2), is dissolved, the Assessing Officer may allow application of such income for the purposes referred to in clause (d) of sub-section (3) in the year in which such trust or institution was dissolved.]
(4) For the purposes of this section “property held under trust” includes a business undertaking so held, and where a claim is made that the income of any such undertaking shall not be included in the total income of the persons in receipt thereof, the 58[Assessing] Officer shall have power to determine the income of such undertaking in accordance with the provisions of this Act relating to assessment; and where any income so determined is in excess of the income as shown in the accounts of the undertaking, such excess shall be deemed to be applied to purposes other than charitable or religious purposes 59[* * *].
60[(4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business.]
61[62(5) The forms and modes of investing or depositing the money referred to in clause (b) of sub-section (2) shall be the following, namely :—
(i) investment in savings certificates as defined in clause (c) of section 263 of the Government Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the Central Government under the Small Savings Schemes of that Government;
(ii) deposit in any account with the Post Office Savings Bank;
(iii) deposit in any account with a scheduled bank or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank).
- —In this clause, “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary 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 bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
(iv) investment in units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);
(v) investment in any security for money created and issued by the Central Government or a State Government;
(vi) investment in debentures issued by, or on behalf of, any company or corporation both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or by a State Government;
(vii) investment or deposit64 in any 65[public sector company]:
66[Provided that where an investment or deposit in any public sector company has been made and such public sector company ceases to be a public sector company,—
(A) such investment made in the shares of such company shall be deemed to be an investment made under this clause for a period of three years from the date on which such public sector company ceases to be a public sector company;
(B) such other investment or deposit shall be deemed to be an investment or deposit made under this clause for the period up to the date on which such investment or deposit becomes repayable by such company;]
(viii) deposits with or investment in any bonds issued by a financial corporation which is engaged in providing long-term finance for industrial development in India and 67[which is eligible for deduction under clause (viii) of sub-section (1) of section 36];
(ix) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and 67[which is eligible for deduction under clause (viii) of sub-section (1) of section 36];
68[(ixa) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for urban infrastructure in India.
- —For the purposes of this clause,—
(a) “long-term finance” means any loan64 or advance where the terms under which moneys are loaned or advanced provide for repayment along with interest thereof during a period of not less than five years;
(b) “public company” 69 shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);
(c) “urban infrastructure” means a project for providing potable water supply, sanitation and sewerage, drainage, solid waste management, roads, bridges and flyovers or urban transport;]
(x) investment in immovable property.
- —“Immovable property” does not include any machi-nery or plant (other than machinery or plant installed in a building for the convenient occupation of the building) even though attached to, or permanently fastened to, anything attached to the earth;]
70[(xi) deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);]
71[(xii) any other form or mode of investment or deposit as may be prescribed.72]
The following sub-sections (6) and (7) shall be inserted after sub-section (5) of section 11 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015:
(6) In this section where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year.
(7) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) of section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and the said registration is in force for any previous year, then, nothing contained in section 10 [other than clause (1) and clause (23C) thereof] shall operate to exclude any income derived from the property held under trust from the total income of the person in receipt thereof for that previous year.
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Section 12: 73[Income of trusts or institutions from contributions.
- 74 75[(1)] 76Any voluntary contributions77 received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from77 property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly.]
78[(2) The value of any services, being medical or educational services, made available by any charitable or religious trust running a hospital or medical institution or an educational institution, to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13, shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable or religious purposes during the previous year in which such services are so provided and shall be chargeable to income-tax notwithstanding the provisions of sub-section (1) of section 11.
Explanation.—For the purposes of this sub-section, the expression “value” shall be the value of any benefit or facility granted or provided free of cost or at concessional rate to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13.]
79[(3) Notwithstanding anything contained in section 11, any amount of donation received by the trust or institution in terms of clause (d) of sub-section (2) of section 80G 80[in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or] which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 81[2004] shall be deemed to be the income of the previous year and shall accordingly be charged to tax.]
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Section 12A: 82[83[Conditions for applicability of sections 11 and 12.]
8412A. 85[(1)] 86The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:—
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form87 and in the prescribed manner to the 88[***] 88a[Principal Commissioner or] Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, 89[whichever is later and such trust or institution is registered under section 12AA] :
90[Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,—
(i) from the date of the creation of the trust or the establishment of the institution if the 91[***] 91a[Principal Commissioner or] Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period92 aforesaid for sufficient reasons;
(ii) from the 1st day of the financial year in which the application is made, if the 93[***] 93a[Principal Commissioner or] Commissioner is not so satisfied:]
94[Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007;]
94[(aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form95 and manner to the 95a[Principal Commissioner or] Commissioner and such trust or institution is registered under section 12AA;]
(b) where the total income of the trust or institution as computed under this Act without giving effect to 96[the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year], the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form97 duly signed and verified by such accountant and setting forth such particulars as may be prescribed.]
(c) 98[***]
99[(2) Where an application has been made on or after the 1st day of June, 2007, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution from the assessment year immediately following the financial year in which such application is made:]
99a[Provided that where registration has been granted to the trust or institution under section 12AA, then, the provisions of sections 11 and 12 shall apply in respect of any income derived from property held under trust of any assessment year preceding the aforesaid assessment year, for which assessment proceedings are pending before the Assessing Officer as on the date of such registration and the objects and activities of such trust or institution remain the same for such preceding assessment year:
Provided further that no action under section 147 shall be taken by the Assessing Officer in case of such trust or institution for any assessment year preceding the aforesaid assessment year only for non-registration of such trust or institution for the said assessment year:
Provided also that provisions contained in the first and second proviso shall not apply in case of any trust or institution which was refused registration or the registration granted to it was cancelled at any time under section 12AA.]
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Section 12AA: 1[Procedure for registration.
- (1) The 2[***] 2a[Principal Commissioner or] Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) 99[or clause (aa) of sub-section (1)] of section 12A, shall—
(a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and
(b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he—
(i) shall pass an order in writing registering the trust or institution;
(ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution,
and a copy of such order shall be sent to the applicant :
Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.
3[(1A) All applications, pending before the 2a[Principal Chief Commissioner or] Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the 2a[Principal Commissioner or] Commissioner and the 2a[Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.]
(2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) 4[or clause (aa) of sub-section (1)] of section 12A.]
5[(3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) 6[or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the 6a[Principal Commissioner or] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution:
Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.]
6b[(4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently it is noticed that the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13, then, the Principal Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution:
Provided that the registration shall not be cancelled under this sub-section, if the trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner.]
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Section 13: 7[Section 11 not to apply in certain cases.
- 8 (1) Nothing contained in section 11 9[or section 12] shall operate so as to exclude from the total income of the previous year of the person in receipt thereof—
(a) any part of the 10income from the property held under a trust for private religious purposes which does not enure for the benefit10 of the public;
(b) in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of this Act, any income thereof if the trust or institution is created or established for the benefit10 of any particular religious community or caste;
(bb) 11[* * *]
(c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof—
(i) if such trust or institution has been created or established after the commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income enures, or
(ii) if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied,
directly or indirectly for the benefit12 of any person referred to in sub-section (3) :
Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution :
Provided further that in the case of a trust for religious purposes or a religious institution (whenever created or established) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3) in so far as such use or application relates to any period before the 1st day of June, 1970;
13[(d) 14in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year—
(i) any funds15 of the trust or institution are invested or deposited15 after the 28th day of February, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11; or
(ii) any funds15 of the trust or institution invested or deposited15 before the 1st day of March, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 continue to remain so invested or deposited after the 30th day of November, 1983; or
16[(iii) any shares in a company, other than—
(A) shares in a public sector company ;
(B) shares prescribed as a form or mode of investment under clause (xii) of sub-section (5) of section 11,
are held by the trust or institution after the 30th day of November, 1983:]
Provided that nothing in this clause shall apply in relation to—
(i) any assets held by the trust or institution where such assets form part of the corpus of the trust or institution as on the 1st day of June, 1973 17[***];
18[(ia) any accretion to the shares, forming part of the corpus mentioned in clause (i), by way of bonus shares allotted to the trust or institution;]
(ii) any assets (being debentures issued by, or on behalf of, any company or corporation) acquired by the trust or institution before the 1st day of March, 1983;
19[(iia) any asset, not being an investment or deposit in any of the forms or modes specified in sub-section (5) of section 11, where such asset is not held by the trust or institution, otherwise than in any of the forms or modes specified in sub-section (5) of section 11, after the expiry of one year from the end of the previous year in which such asset is acquired or the 31st day of March, 20[1993], whichever is later;]
(iii) any funds representing the profits and gains of business, being profits and gains of any previous year relevant to the assessment year commencing on the 1st day of April, 1984 or any subsequent assessment year.
- —Where the trust or institution has any other income in addition to profits and gains of business, the provisions of clause (iii) of this proviso shall not apply unless the trust or institution maintains separate books of account in respect of such business.]
21[Explanation.—For the purposes of sub-clause (ii) of clause (c), in determining whether any part of the income or any property of any trust or institution is during the previous year used or applied, directly or indirectly, for the benefit of any person referred to in sub-section (3), in so far as such use or application relates to any period before the 1st day of July, 1972, no regard shall be had to the amendments made to this section by section 7 [other than sub-clause (ii) of clause (a) thereof] of the Finance Act, 1972.]
(2) Without prejudice to the generality of the provisions of clause (c) 22[and clause (d)] of sub-section (1), the income or the property23 of the trust or institution or any part of such income or property shall, for the purposes of that clause, be deemed to have been used or applied for the benefit of a person referred to in sub-section (3),—
(a) if any part of the income or property24 of the trust or institution is, or continues to be, lent24 to any person referred to in sub-section (3) for any period during the previous year without either adequate security or adequate interest or both;
(b) if any land, building or other property24 of the trust or institution is, or continues to be, made available for the use of any person referred to in sub-section (3), for any period during the previous year without charging adequate rent or other compensation;
(c) if any amount is paid by way of salary, allowance or otherwise during the previous year to any person referred to in sub-section (3) out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid is in excess of what may be reasonably paid for such services;
(d) if the services of the trust or institution are made available to any person referred to in sub-section (3) during the previous year without adequate remuneration or other compensation;
(e) if any share, security or other property is purchased by or on behalf of the trust or institution from any person referred to in sub-section (3) during the previous year for consideration which is more than adequate;
(f) if any share, security or other property is sold by or on behalf of the trust or institution to any person referred to in sub-section (3) during the previous year for consideration which is less than adequate;
25[(g) if any income or property of the trust or institution is diverted during the previous year in favour of any person referred to in sub-section (3):
Provided that this clause shall not apply where the income, or the value of the property or, as the case may be, the aggregate of the income and the value of the property, so diverted does not exceed one thousand rupees;]
(h) if any funds26 of the trust or institution are, or continue to remain, invested26 for any period during the previous year (not being a period before the 1st day of January, 1971), in any concern26 in which any person referred to in sub-section (3) has a substantial interest.
(3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely :—
(a) the author of the trust or the founder26 of the institution26;
(b) any person who has made a substantial contribution to the trust or institution, 27[that is to say, any person whose total contribution up to the end of the relevant previous year exceeds 28[fifty] thousand rupees];
(c) where such author, founder or person is a Hindu undivided family, a member of the family;
29[(cc) any trustee of the trust or manager (by whatever name called) of the institution;]
(d) any relative of any such author, founder, person, 30[member, trustee or manager] as aforesaid;
(e) any concern in which any of the persons referred to in clauses (a), (b), (c) 31[, (cc)] and (d) has a substantial interest.
(4) Notwithstanding anything contained in clause (c) of sub-section (1) 32[but without prejudice to the provisions contained in clause (d) of that sub-section], in a case where the aggregate of the funds of the trust or institution invested in a concern in which any person referred to in sub-section (3) has a substantial interest, does not exceed five per cent of the capital33 of that concern, the exemption under section 11 34[or section 12] shall not be denied in relation to any income other than the income arising to the trust or the institution from such investment, by reason only that the 35[funds] of the trust or the institution have been invested in a concern in which such person has a substantial interest.
36[(5) Notwithstanding anything contained in clause (d) of sub-section (1), where any assets (being debentures issued by, or on behalf of, any company or corpora-tion) are acquired by the trust or institution after the 28th day of February, 1983 but before the 25th day of July, 1991, the exemption under section 11 or section 12 shall not be denied in relation to any income other than the income arising to the trust or the institution from such assets, by reason only that the funds of the trust or the institution have been invested in such assets if such funds do not continue to remain so invested in such assets after the 31st day of March, 1992.]
37[(6) Notwithstanding anything contained in sub-section (1) or sub-section (2), but without prejudice to the provisions contained in sub-section (2) of section 12, in the case of a charitable or religious trust running an educational institution or a medical institution or a hospital, the exemption under section 11 or section 12 shall not be denied in relation to any income, other than the income referred to in sub-section (2) of section 12, by reason only that such trust has provided educational or medical facilities to persons referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3).]
38[(7) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof, any anonymous donation referred to in section 115BBC on which tax is payable in accordance with the provisions of that section.]
39[(8) Nothing contained in section 11 or section 12 shall operate so as to exclude any income from the total income of the previous year of the person in receipt thereof if the provisions of the first proviso to clause (15) of section 2 become applicable in the case of such person in the said previous year.]
40[Explanation 1.—For the purposes of sections 11, 12, 12A and this section, “trust” includes any other legal obligation and for the purposes of this section “relative”, in relation to an individual, means—
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) any lineal ascendant or descendant of the individual;
(v) any lineal ascendant or descendant of the spouse of the individual;
(vi) spouse of a person referred to in sub-clause (ii), sub-clause (iii), sub-clause (iv) or sub-clause (v);
(vii) any lineal descendant of a brother or sister of either the individual or of the spouse of the individual.]
Explanation 2.—A trust or institution created or established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or women and children shall not be deemed to be a trust or institution created or established for the benefit of a religious community or caste within the meaning of clause (b) of sub-section (1).
Explanation 3.—For the purposes of this section, a person shall be deemed to have a substantial interest in a concern,—
(i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of the other persons referred to in sub-section (3);
(ii) in the case of any other concern, if such person is entitled, or such person and one or more of the other persons referred to in sub-section (3) are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern.]
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Section 13A: 41[Special provision relating to incomes of political parties.
- Any income of a political party which is chargeable under the head 42[***] “Income from house property” or “Income from other sources” or 43[“Capital gains” or] any income by way of voluntary contributions received by a political party from any person shall not be included in the total income of the previous year of such political party :
Provided that—
(a) such political party keeps and maintains such books of account and other documents as would enable the 44[Assessing] Officer to properly deduce its income therefrom;
(b) in respect of each such voluntary contribution in excess of 45[twenty] thousand rupees, such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution; and
(c) the accounts of such political party are audited by an accountant as defined in the Explanation below sub-section (2) of section 288 :
46[Provided further that if the treasurer of such political party or any other person authorised by that political party in this behalf fails to submit a report under sub-section (3) of section 29C of the Representation of the People Act, 1951 (43 of 1951) for a financial year, no exemption under this section shall be available for that political party for such financial year.]
47[Explanation.—For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).]
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Section 13B: 48[Special provisions relating to voluntary contributions received by electoral trust.
- Any voluntary contributions received by an electoral trust shall not be included in the total income of the previous year of such electoral trust, if—
(a) such electoral trust distributes to any political party, registered under section 29A of the Representation of the People Act, 1951 (43 of 1951), during the said previous year, ninety-five per cent of the aggregate donations received by it during the said previous year along with the surplus, if any, brought forward from any earlier previous year; and
(b) such electoral trust functions in accordance with the rules49 made by the Central Government.]
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Chapter IV: Computation of total income
Section -14: Heads of income
Heads of income.
- 50 Save as otherwise provided by this Act, all income shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income :—
- —Salaries.
- —51[***]
- —Income from house property.
- —Profits and gains of business or profession.
- —Capital gains.
- —Income from other sources.
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Section 14A: 52[Expenditure incurred in relation to income not includible in total income53.
- 54[(1)] For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred55 by the assessee in relation to55 income which does not form part of the total income55 under this Act.]
54[(2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed56, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act.
(3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act :]
57[Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001.]
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Section 15: Salaries
- 58 59The following income60 shall be chargeable to income-tax under the head “Salaries” —
(a) any salary due60 from an employer or a former employer to an assessee in the previous year, whether paid60 or not;
(b) any salary paid60 or allowed60 to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him;
(c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year.
61[Explanation 1].—For the removal of doubts, it is hereby declared that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due.
62[Explanation 2.—Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as “salary” for the purposes of this section.]
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Section 16: Deductions from salaries.
- 63 The income chargeable under the head “Salaries” shall be computed after making the following deductions, namely :—
(i) 64[***]
65[(ii) a deduction in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or other perquisite) or five thousand rupees, whichever is less;]
66[(iii) a deduction of any sum paid by the assessee on account of a tax on employment within the meaning of clause (2) of article 27667 of the Constitution, leviable by or under any law.]
(iv) 68[***]
(v) 69[***]
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Section 17: “Salary”, “perquisite” and “profits in lieu of salary” defined.
- 70 71For the purposes of sections 15 and 16 and of this section,—
(1) “salary” 72 includes72—
(i) wages;
(ii) any annuity or pension;
(iii) any gratuity72;
(iv) any fees72, commissions, perquisites or profits72 in lieu of or in addition to any salary or wages;
(v) any advance of salary;
73[(va) any payment received by an employee in respect of any period of leave not availed of by him;]
(vi) the annual accretion to the balance at the credit of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under rule 6 of Part A of the Fourth Schedule;
(vii) the aggregate of all sums that are comprised in the transferred balance as referred to in sub-rule (2) of rule 11 of Part A of the Fourth Schedule of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under sub-rule (4) thereof; and
74[(viii) the contribution made by the Central Government 75[or any other employer] in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD;]
76(2) “perquisite” includes—
77(i) the value of rent-free accommodation provided to the assessee by his employer;
(ii) the value of any concession in the matter of rent78 respecting any accommodation provided to the assessee by his employer;
79[Explanation 1.—For the purposes of this sub-clause, concession in the matter of rent shall be deemed to have been provided if,—
80[(a) in a case where an unfurnished accommodation is provided by any employer other than the Central Government or any State Government and—
(i) the accommodation is owned by the employer, the value of the accommodation determined at the specified rate in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;
(ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation being the actual amount of lease rental paid or payable by the employer or fifteen per cent of salary, whichever is lower, in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;]
(b) in a case where a furnished accommodation is provided by the Central Government or any State Government, the licence fee determined by the Central Government or any State Government in respect of the accommodation in accordance with the rules framed by such Government as increased by the value of furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the aggregate of the rent recoverable from, or payable by, the assessee and any charges paid or payable for the furniture and fixtures by the assessee;
(c) in a case where a furnished accommodation is provided by an employer other than the Central Government or any State Government and—
(i) the accommodation is owned by the employer, the value of the accommodation determined under sub-clause (i) of clause (a) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;
(ii) the accommodation is taken on lease or rent by the employer, the value of the accommodation determined under sub-clause (ii) of clause (a) as increased by the value of the furniture and fixtures in respect of the period during which the said accommodation was occupied by the assessee during the previous year, exceeds the rent recoverable from, or payable by, the assessee;
(d) in a case where the accommodation is provided by the employer in a hotel (except where the assessee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another), the value of the accommodation determined at the rate of twenty-four per cent of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, whichever is lower, for the period during which such accommodation is provided, exceeds the rent recoverable from, or payable by, the assessee.
Explanation 2.—For the purposes of this sub-clause, value of furniture and fixture shall be ten per cent per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the assessee during the previous year.
Explanation 3.—For the purposes of this sub-clause, “salary” includes the pay, allowances, bonus or commission payable monthly or otherwise or any monetary payment, by whatever name called, from one or more employers, as the case may be, but does not include the following, namely:—
(a) dearness allowance or dearness pay unless it enters into the computation of superannuation or retirement benefits of the employee concerned;
(b) employer’s contribution to the provident fund account of the employee;
(c) allowances which are exempted from the payment of tax;
(d) value of the perquisites specified in this clause;
(e) any payment or expenditure specifically excluded under the proviso to this clause.]
81[Explanation 4.—For the purposes of this sub-clause, “specified rate” shall be—
(i) fifteen per cent of salary in cities having population exceeding twenty-five lakhs as per 2001 census;
(ii) ten per cent of salary in cities having population exceeding ten lakhs but not exceeding twenty-five lakhs as per 2001 census; and
(iii) seven and one-half per cent of salary in any other place;]
(iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases—
(a) by a company to an employee who is a director thereof;
(b) by a company to an employee being a person who has a substantial interest in the company;
(c) by any employer (including a company) to an employee to whom the provisions of paragraphs (a) and (b) of this sub-clause do not apply and whose income 82[under the head “Salaries” (whether due from, or paid or allowed by, one or more employers), exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds 83[fifty] thousand rupees:]
84[***]
85[Explanation.—For the removal of doubts, it is hereby declared that the use of any vehicle provided by a company or an employer for journey by the assessee from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this sub-clause;]
(iiia) 86[***]
(iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee;
(v) any sum payable by the employer, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund 87[or a Deposit-linked Insurance Fund established under section 3G of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (46 of 1948), or, as the case may be, section 6C of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952)], to effect an assurance on the life of the assessee or to effect a contract for an annuity; 88[***]
89[(vi) the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the assessee.
Explanation.—For the purposes of this sub-clause,—
(a) “specified security” means the securities as defined in clause (h) of section 290 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and, where employees’ stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme;
(b) “sweat equity shares” means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;
(c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in respect of such security or shares;
(d) “fair market value” means the value determined in accordance with the method as may be prescribed;
(e) “option” means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;
(vii) the amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees; and
(viii) the value of any other fringe benefit or amenity91 as may be prescribed92:]
93[Provided that nothing in this clause shall apply to,—
(i) the value of any medical treatment provided to an employee or any member of his family in any hospital maintained by the employer;
94[(ii) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family—
(a) in any hospital maintained by the Government or any local authority or any other hospital approved95 by the Government for the purposes of medical treatment of its employees;
(b) in respect of the prescribed diseases96 or ailments, in any hospital approved by the 96a[Principal Chief Commissioner or] Chief Commissioner having regard to the prescribed guidelines97 :
Provided that, in a case falling in sub-clause (b), the employee shall attach98 with his return of income a certificate from the hospital specifying the disease or ailment for which medical treatment was required and the receipt for the amount paid to the hospital;]
(iii) any portion of the premium paid by an employer in relation to an employee, to effect or to keep in force an insurance on the health of such employee under any scheme approved by the Central Government 99[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999),] for the purposes of clause (ib) of sub-section (1) of section 36;
(iv) any sum paid by the employer in respect of any premium paid by the employee to effect or to keep in force an insurance on his health or the health of any member of his family under any scheme approved by the Central Government 1[or the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999),] for the purposes of section 80D;
(v) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family [other than the treatment referred to in clauses (i) and (ii)]; so, however, that such sum does not exceed 2[fifteen] thousand rupees in the previous year;
(vi) any expenditure incurred by the employer on—
(1) medical treatment of the employee, or any member of the family of such employee, outside India;
(2) travel 3[and] stay abroad of the employee or any member of the family of such employee for medical treatment;
(3) travel and stay abroad of one attendant who accompanies the patient in connection with such treatment,
4[subject to the condition that—
(A) the expenditure on medical treatment and stay abroad shall be excluded from perquisite only to the extent permitted by the Reserve Bank of India; and
(B) the expenditure on travel shall be excluded from perquisite only in the case of an employee whose gross total income, as computed before including therein the said expenditure, does not exceed two lakh rupees;]
(vii) any sum paid by the employer in respect of any expenditure actually incurred by the employee for any of the purposes specified in clause (vi) subject to the conditions specified in or under that clause :
5[Provided further that for the assessment year beginning on the 1st day of April, 2002, nothing contained in this clause shall apply to any employee whose income under the head “Salaries” (whether due from, or paid or allowed by, one or more employers) exclusive of the value of all perquisites not provided for by way of monetary payment, does not exceed one lakh rupees.]
- —For the purposes of clause (2),—
(i) “hospital” includes a dispensary or a clinic 6[or a nursing home];
(ii) “family”, in relation to an individual, shall have the same meaning as in clause (5) of section 10; and
(iii) “gross total income” shall have the same meaning as in clause (5) of section 80B;]
7[* * *]
8(3) “profits9 in lieu of salary”9 includes—
(i) the amount of any compensation9 due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto;
(ii) any payment (other than any payment referred to in clause (10) 10[, clause (10A)] 11[, clause (10B)], clause (11), 12[clause (12) 13[, clause (13)] or clause (13A)] of section 10), due to or received by an assessee from an employer or a former employer or from a provident or other fund 14[* * *], to the extent to which it does not consist of contributions by the assessee or 15[interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
Explanation.—For the purposes of this sub-clause, the expression “Keyman insurance policy” shall have the meaning assigned to it in clause (10D) of section 10;]
16[(iii) any amount due to or received, whether in lump sum or otherwise, by any assessee from any person—
(A) before his joining any employment with that person; or
(B) after cessation of his employment with that person.]
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Section 18, Income-tax Act, 1961-2014
17[***]
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Section 19, Income-tax Act, 1961-2014
17[***]
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Section 20, Income-tax Act, 1961-2014
17[***]
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Section 21, Income-tax Act, 1961-2014
17[***]
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Section 22: Income from house property
Income from house property.
- 18 19The annual value of property consisting of any buildings20 or lands appurtenant20 thereto of which the assessee is the owner20, other than such portions of such property as he may occupy20 for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head “Income from house property” .
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Section 23: 21[Annual value how determined.
- (1) For the purposes of section 22, the annual value of any property shall be deemed to be—
(a) the sum for which the property might reasonably be expected to let from year to year; or
(b) where the property or any part of the property is let and the actual rent received or receivable20 by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or
(c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable :
Provided that the taxes levied22 by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him.
Explanation.—For the purposes of clause (b) or clause (c) of this sub-section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules23-24 as may be made in this behalf, the amount of rent which the owner cannot realise.
(2) Where the property consists of a house or part of a house which—
(a) is in the occupation of the owner for the purposes of his own residence; or
(b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him,
the annual value of such house or part of the house shall be taken to be nil.
(3) The provisions of sub-section (2) shall not apply if—
(a) the house or part of the house is actually let during the whole or any part of the previous year; or
(b) any other benefit therefrom is derived by the owner.
(4) Where the property referred to in sub-section (2) consists of more than one house—
(a) the provisions of that sub-section shall apply only in respect of one of such houses, which the assessee may, at his option, specify in this behalf;
(b) the annual value of the house or houses, other than the house in respect of which the assessee has exercised an option under clause (a), shall be determined under sub-section (1) as if such house or houses had been let.]
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Section 24: 25[ Deductions from income from house property.
- Income chargeable under the head “Income from house property” shall be computed after making the following deductions, namely:—
(a) a sum equal to thirty per cent of the annual value;
(b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital:
Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees :
Provided further that where the property referred to in the first proviso is acquired or constructed with capital borrowed on or after the 1st day of April, 1999 and such acquisition or construction is completed 26[within three years from the end of the financial year in which capital was borrowed], the amount of deduction under this clause shall not exceed 26a[one lakh fifty thousand rupees].
Explanation.—Where the property has been acquired or constructed with borrowed capital, the interest, if any, payable on such capital borrowed for the period prior to the previous year in which the property has been acquired or constructed, as reduced by any part thereof allowed as deduction under any other provision of this Act, shall be deducted under this clause in equal instalments for the said previous year and for each of the four immediately succeeding previous years:]
27[Provided also that no deduction shall be made under the second proviso unless the assessee furnishes a certificate, from the person to whom any interest is payable on the capital borrowed, specifying the amount of interest payable by the assessee for the purpose of such acquisition or construction of the property, or, conversion of the whole or any part of the capital borrowed which remains to be repaid as a new loan.
Explanation.—For the purposes of this proviso, the expression “new loan” means the whole or any part of a loan taken by the assessee subsequent to the capital borrowed, for the purpose of repayment of such capital.]
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Section 25: Amounts not deductible from income from house property.
- Notwithstanding anything contained in section 24, any 28[***] interest chargeable under this Act which is payable outside India (not being interest on a loan issued for public subscription before the 1st day of April, 1938), on which tax has not been paid or deducted under Chapter XVII-B and in respect of which there is no person in India who may be treated as an agent under section 163 shall not be deducted in computing the income chargeable under the head “Income from house property” .
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Section 25A: 29[Special provision for cases where unrealised rent allowed as deduction is realised subsequently.
- Where a deduction has been made under clause (x) of sub-section (1) of section 24 30[as it stood immediately before its substitution by the Finance Act, 2001] in the assessment for any year in respect of rent from property let to a tenant which the assessee cannot realise and subsequently during any previous year the assessee has realised any amount in respect of such rent, the amount so realised shall be deemed to be income chargeable under the head “Income from house property” and accordingly charged to income-tax (without making any deduction under section 23 or section 24 31[as it stood immediately before its substitution by the Finance Act, 2001]) as the income of that previous year, whether the assessee is the owner of that property in that year or not.]
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Section 25AA: 31[Unrealised rent received subsequently to be charged to income-tax.
- Where the assessee cannot realise rent from a property let to a tenant and subsequently the assessee has realised any amount in respect of such rent, the amount so realised shall be deemed to be income chargeable under the head “Income from house property” and accordingly charged to income-tax as the income of that previous year in which such rent is realised whether or not the assessee is the owner of that property in that previous year.]
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Section 25B: 32[Special provision for arrears of rent received.
- Where the assessee—
(a) is the owner of any property consisting of any buildings or lands appurtenant thereto which has been let to a tenant; and
(b) has received any amount, by way of arrears of rent from such property, not charged to income-tax for any previous year,
the amount so received, after deducting 33[a sum equal to thirty per cent of such amount], shall be deemed to be the income chargeable under the head “Income from house property” and accordingly charged to income-tax as the income of that previous year in which such rent is received, whether the assessee is the owner of that property in that year or not.]
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Section 26: Property owned by co-owners.
- 34 35Where property consisting of buildings or buildings and lands appurtenant thereto is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income.
36[Explanation.—For the purposes of this section, in applying the provisions of sub-section (2) of section 23 for computing the share of each such person as is referred to in this section, such share shall be computed, as if each such person is individually entitled to the relief provided in that sub-section.]
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Section 27: “Owner of house property”, “annual charge”, etc., defined.
- 37 For the purposes of sections 22 to 26—
(i) an individual who transfers otherwise than for adequate considera-tion any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred;
(ii) the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate ;
38[(iii) a member of a co-operative society, company or other association of persons to whom a building or part thereof is allotted or leased under a house building scheme of the society, company or association, as the case may be, shall be deemed to be the owner of that building or part thereof ;
(iiia) a person who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in 39section 53A of the Transfer of Property Act, 1882 (4 of 1882), shall be deemed to be the owner of that building or part thereof ;
(iiib) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is referred to in clause (f) of section 269UA, shall be deemed to be the owner of that building or part thereof;]
(iv) 40[***]
(v) 40[***]
(vi) taxes levied by a local authority in respect of any property shall be deemed to include service taxes levied by the local authority in respect of the property.
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Section 28: Profits and gains of business or profession
Profits and gains of business or profession.
- 41 42The following income shall be chargeable to income-tax under the head “Profits and gains of business or profession”,—
(i) the profits and gains43 of any business or profession43 which was carried on by the assessee at any time during the previous year ;
(ii) any compensation43 or other payment due to43 or received by43,—
(a) any person, by whatever name called, managing the whole or substantially the whole of the affairs of an Indian company, at or in connection with the termination of his management or the modification of the terms and conditions relating thereto;
(b) any person, by whatever name called, managing the whole or substantially the whole of the affairs in India of any other company, at or in connection with the termination of his office or the modification of the terms and conditions relating thereto ;
(c) any person, by whatever name called, holding an agency in India for any part of the activities relating to the business of any other person, at or in connection with the termination of the agency or the modification of the terms and conditions relating thereto ;
44[(d) any person, for or in connection with the vesting in the Government, or in any corporation owned or controlled by the Government, under any law for the time being in force, of the management of any property or business ;]
(iii) income derived by a trade, professional or similar45 association from specific services45 performed for its members ;
46[(iiia) profits on sale of a licence granted under the Imports (Control) Order, 1955, made under the Imports and Exports (Control) Act, 1947 (18 of 1947) ;]
47[(iiib) cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India ;]
48[(iiic) any duty of customs or excise re-paid or re-payable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971 ;]
49[(iiid) any profit50 on the transfer of the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);]
51[(iiie) any profit on the transfer of the Duty Free Replenishment Certificate, being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) ;]
52[(iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession ;]
53[(v) any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from such firm :
Provided that where any interest, salary, bonus, commission or remuneration, by whatever name called, or any part thereof has not been allowed to be deducted under clause (b) of section 40, the income under this clause shall be adjusted to the extent of the amount not so allowed to be deducted ;]
54[(va) any sum, whether received or receivable, in cash or kind, under an agreement for—
(a) not carrying out any activity in relation to any business; or
(b) not sharing any know-how, patent, copyright, trade-mark, licence, franchise or any other business or commercial right of similar nature or information or technique likely to assist in the manufacture or processing of goods or provision for services:
Provided that sub-clause (a) shall not apply to—
(i) any sum, whether received or receivable, in cash or kind, on account of transfer of the right to manufacture, produce or process any article or thing or right to carry on any business, which is chargeable under the head “Capital gains” ;
(ii) any sum received as compensation, from the multilateral fund of the Montreal Protocol on Substances that Deplete the Ozone layer under the United Nations Environment Programme, in accordance with the terms of agreement entered into with the Government of India.
- —For the purposes of this clause,—
(i) “agreement” includes any arrangement or understanding or action in concert,—
(A) whether or not such arrangement, understanding or action is formal or in writing; or
(B) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings;
(ii) “service” means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial nature such as accounting, banking, communication, conveying of news or information, advertising, entertainment, amusement, education, financing, insurance, chit funds, real estate, construction, transport, storage, processing, supply of electrical or other energy, boarding and lodging;]
55[(vi) any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
Explanation.—For the purposes of this clause, the expression “Keyman insurance policy” shall have the meaning assigned to it in clause (10D) of section 10;]
56[(vii) any sum, whether received or receivable, in cash or kind, on account of any capital asset (other than land or goodwill or financial instrument) being demolished, destroyed, discarded or transferred, if the whole of the expenditure on such capital asset has been allowed as a deduction under section 35AD.]
Explanation 1.—[Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]
Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as “speculation business” ) shall be deemed to be distinct and separate from any other business.
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Section 29: Income from profits and gains of business or profession, how computed.
- 57The income referred to in section 28 shall be computed in accordance with the provisions contained in sections 30 to 58[43D].
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Section 30: Rent, rates, taxes, repairs and insurance for buildings.
- 57 In respect of rent, rates, taxes, repairs and insurance for premises, used for the purposes of the business59 or profession, the following deductions shall be allowed—
(a) where the premises are occupied by the assessee—
(i) as a tenant, the rent paid for such premises ; and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs ;
(ii) otherwise than as a tenant, the amount paid by him on account of current repairs59 to the premises ;
(b) any sums paid on account of land revenue, local rates or municipal taxes ;
(c) the amount of any premium paid in respect of insurance against risk of damage or destruction of the premises.
60[Explanation.—For the removal of doubts, it is hereby declared that the amount paid on account of the cost of repairs referred to in sub-clause (i), and the amount paid on account of current repairs referred to in sub-clause (ii), of clause (a), shall not include any expenditure in the nature of capital expenditure.]
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Section 31: Repairs and insurance of machinery, plant and furniture.
- 61 62In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed—
(i) the amount paid on account of current repairs63 thereto ;
(ii) the amount of any premium paid in respect of insurance against risk of damage or destruction thereof.
64[Explanation.—For the removal of doubts, it is hereby declared that the amount paid on account of current repairs shall not include any expenditure in the nature of capital expenditure.]
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Section 32: Depreciation.
- 65 (1) 66[In respect of depreciation of—
(i) buildings67, machinery67, plant or furniture, being tangible assets;
(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature67, being intangible assets acquired on or after the 1st day of April, 1998,
owned67, wholly or partly, by the assessee67 and used for the purposes of the business67 or profession, the following deductions shall be allowed—]
68[(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed69;]
(ii) 70[in the case of any block of assets, such percentage on the written down value thereof as may be prescribed71:]
72[***]
73[Provided 74[***] that no deduction shall be allowed under this clause in respect of—
(a) any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975 75[but before the 1st day of April, 2001], unless it is used—
(i) in a business of running it on hire for tourists ; or
(ii) outside India in his business or profession in another country ; and
(b) any machinery or plant if the actual cost thereof is allowed as a deduction in one or more years under an agreement entered into by the Central Government under section 42 :]
76[Provided further that where an asset referred to in clause (i) or clause (ii) 77[or clause (iia)], as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) 77[or clause (iia)], as the case may be :]
78[Provided also that where an asset being commercial vehicle is acquired by the assessee on or after the 1st day of October, 1998 but before the 1st day of April, 1999 and is put to use before the 1st day of April, 1999 for the purposes of business or profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value thereof as may be prescribed.
Explanation.—For the purposes of this proviso,—
(a) the expression “commercial vehicle” means “heavy goods vehicle”, “heavy passenger motor vehicle”, “light motor vehicle”, “medium goods vehicle” and “medium passenger motor vehicle” but does not include “maxi-cab”, “motor-cab”, “tractor” and “road-roller” ;
(b) the expressions “heavy goods vehicle” 79, “heavy passenger motor vehicle” 79, “light motor vehicle” 79, “medium goods vehicle” 79, “medium passenger motor vehicle” 79, “maxi-cab” 79, “motor-cab” 79, “tractor” 79 and “road roller” shall have the meanings respectively as assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988):]
80[Provided also that, in respect of the previous year relevant to the assessment year commencing on the 1st day of April, 1991, the deduction in relation to any block of assets under this clause shall, in the case of a company, be restricted to seventy-five per cent of the amount calculated at the percentage, on the written down value of such assets, prescribed under this Act immediately before the commencement of the Taxation Laws (Amendment) Act, 1991:]
81[Provided also that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor and the successor in the case of succession referred to in 82[clause (xiii), clause (xiiib) and clause (xiv)] of section 47 or section 170 or to the amalgamating company and the amalgamated company in the case of amalgamation, or to the demerged company and the resulting company in the case of demerger, as the case may be, shall not exceed in any previous year the deduction calculated at the prescribed rates as if the succession or the amalgamation or the demerger, as the case may be, had not taken place, and such deduction shall be apportioned between the predecessor and the successor, or the amalgamating company and the amalgamated company, or the demerged company and the resulting company, as the case may be, in the ratio of the number of days for which the assets were used by them.]
83[Explanation 1.—Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee.
Explanation 2.—For the purposes of this 84[sub-section] “written down value of the block of assets” shall have the same meaning as in clause* (c) of sub-section† (6) of section 43.]
85[Explanation 3.—For the purposes of this sub-section, 86[the expression “assets” ] shall mean—
(a) tangible assets, being buildings, machinery, plant or furniture;
(b) intangible assets, being know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature87.
Explanation 4.—For the purposes of this sub-section, the expression “know-how” means any industrial information or technique likely to assist in the manufacture or processing87 of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto).
88[Explanation 5.—For the removal of doubts, it is hereby declared that the provisions of this sub-section shall apply whether or not the assessee has claimed the deduction in respect of depreciation in computing his total income;]
89[(iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing 90[or in the business of generation or generation and distribution of power], a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii) :
Provided that no deduction shall be allowed in respect of—
(A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or
(B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or
(C) any office appliances or road transport vehicles; or
(D) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year;]
91[(iii) in the case of any building, machinery, plant or furniture in respect of which depreciation is claimed and allowed under clause (i) and which is sold, discarded, demolished or destroyed in the previous year (other than the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof :
Provided that such deficiency is actually written off in the books of the assessee.
Explanation.—For the purposes of this clause,—
(1) “moneys payable” in respect of any building, machinery, plant or furniture includes—
(a) any insurance, salvage or compensation moneys payable in respect thereof;
(b) where the building, machinery, plant or furniture is sold, the price for which it is sold,
so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or, as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value, if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso;
(2) “sold” includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is 92[an Indian company or in a scheme of amalgamation of a banking company, as referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a banking institution as referred to in sub-section (15) of section 45 of the said Act, sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of that Act93, of any asset by the banking company to the banking institution.]]
(iv) 94[***]
(v) 95[***]
(vi) 96[***]
(1A) 97[***]
98[(2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year99, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.]
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Section 32A: 1[Investment allowance.2
332A. (1) In respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business4 carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed4 or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent of the actual cost of the ship, aircraft, machinery or plant to the assessee :
5[Provided that in respect of a ship or an aircraft or machinery or plant specified in sub-section (8B), this sub-section shall have effect as if for the words “twenty-five per cent”, the words “twenty per cent” had been substituted :]
Provided 5[further] that no deduction shall be allowed under this section in respect of—
(a) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a guest house ;
(b) any office appliances6 or road transport vehicles6 ;
(c) any ship, machinery or plant in respect of which the deduction by way of development rebate is allowable under section 33 ; and
(d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year.
5[Explanation.—For the purposes of this sub-section, “actual cost” means the actual cost of the ship, aircraft, machinery or plant to the assessee as reduced by that part of such cost which has been met out of the amount released to the assessee under sub-section (6) of section 32AB.]
(2) The ship or aircraft or machinery or plant referred to in sub-section (1) shall be the following, namely :—
(a) a new ship or new aircraft acquired after the 31st day of March, 1976, by an assessee engaged in the business of operation of ships or aircraft ;
(b) any new machinery or plant installed6 after the 31st day of March, 1976,—
(i) for the purposes of business of generation or distribution of electricity or any other form of power ; or
7[(ii) in a small-scale industrial undertaking8 for the purposes of business of manufacture8 or production8 of any article or thing8 ; or
(iii) in any other industrial undertaking8 for the purposes of business of construction, manufacture8 or production8 of any article or thing8, not being an article or thing8 specified in the list in the Eleventh Schedule :]
9[Provided that nothing contained in clauses (a) and (b) shall apply in relation to,—
(i) a new ship or new aircraft acquired, or
(ii) any new machinery or plant installed,
after the 31st day of March, 1987 but before the 1st day of April, 1988, unless such ship or aircraft is acquired or such machinery or plant is installed in the circumstances specified in clause (a) of sub-section (8B) and the assessee furnishes evidence to the satisfaction of the Assessing Officer as specified in that clause ;]
10[(c) any new machinery or plant installed after the 31st day of March, 1983, but before the 11[1st day of April, 1987], for the purposes of business of repairs to ocean-going vessels or other powered craft if the business is carried on by an Indian company and the business so carried on is for the time being approved12 for the purposes of this clause by the Central Government.]
- —For the purposes of this sub-section and 13[sub-sections (2B) 14[, (2C)] and (4)],—
15[(1)(a) “new ship” or “new aircraft” includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India ;
(b) “new machinery or plant” includes machinery or plant which before its installation by the assessee was used outside India by any other person, if the following conditions are fulfilled, namely :—
(i) such machinery or plant was not, at any time previous to the date of such installation by the assessee, used in India ;
(ii) such machinery or plant is imported into India from any country outside India ; and
(iii) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee,]
(2) an industrial undertaking shall be deemed to be a small-scale industrial undertaking, if the aggregate value of the machinery and plant (other than tools, jigs, dies and moulds) installed, as on the last day of the previous year, for the purposes of the business of the undertaking 16[does not exceed,—
17[(i) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees ;
(ii) in a case where the previous year ends after the 31st day of July, 1980, but before the 18th day of March, 1985, twenty lakh rupees; and
(iii) in a case where the previous year ends after the 17th day of March, 1985, thirty-five lakh rupees,]]
and for this purpose the value of any machinery or plant shall be,—
(a) in the case of any machinery or plant owned by the assessee, the actual cost thereof to the assessee ; and
(b) in the case of any machinery or plant hired by the assessee, the actual cost thereof as in the case of the owner of such machinery or plant.
18[(2A) The deduction under sub-section (1) shall not be denied in respect of any machinery or plant installed and used mainly for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule, by reason only that such machinery or plant is also used for the purposes of business of construction, manufacture or production of any article or thing specified in the said list.]
18[(2B) Where any new machinery or plant is installed after the 30th day of June, 1977, but before the 1st day of April, 19[1987], for the purposes of business of manufacture or production of any article or thing and such article or thing—
(a) is manufactured or produced by using any technology (including any process) or other know-how developed in, or
(b) is an article or thing invented in,
a laboratory owned or financed by the Government, or a laboratory owned by a public sector company or a University or by an institution recognised in this behalf by the prescribed authority,20
the provisions of sub-section (1) shall have effect in relation to such machinery or plant as if for the words “twenty-five per cent”, the words “thirty-five per cent” had been substituted, if the following conditions are fulfilled, namely :—
(i) the right to use such technology (including any process) or other know-how or to manufacture or produce such article or thing has been acquired from the owner of such laboratory or any person deriving title from such owner ;
(ii) the assessee furnishes, along with his return of income for the assessment year for which the deduction is claimed, a certificate from the prescribed authority20 to the effect that such article or thing is manufactured or produced by using such technology (including any process) or other know-how developed in such laboratory or is an article or thing invented in such laboratory ; and
(iii) the machinery or plant is not used for the purpose of business of manufacture or production of any article or thing specified in the list in the Eleventh Schedule.
Explanation.—For the purposes of this sub-section,—
(a) “laboratory financed by the Government” means a laboratory owned by any body [including a society registered under the Societies Registration Act, 1860 (21 of 1860)] and financed wholly or mainly by the Government;
(b) 21[***]
(c) “University” means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956) to be a University for the purposes of that Act.]
22[(2C) Where any new machinery or plant, being machinery or plant which would assist in control of pollution or protection of environment and which has been notified23 in this behalf by the Central Government in the Official Gazette, is installed after the 31st day of May, 1983 24[but before the 1st day of April, 1987], in any industrial undertaking referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii) of clause (b) of sub-section (2), the provisions of subsection (1) shall have effect in relation to such machinery or plant as if for the words “twenty-five per cent”, the words “thirty-five per cent” had been substituted.]
(3) Where the total income of the assessee assessable for the assessment year relevant to the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, or, as the case may be, the immediately succeeding previous year (the total income for this purpose being computed after deduction of the allowances under section 33 and section 33A, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VI-A) is nil or is less than the full amount of the investment allowance,—
(i) the sum to be allowed by way of investment allowance for that assessment year under sub-section (1) shall be only such amount as is sufficient to reduce the said total income to nil ; and
(ii) the amount of the investment allowance, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the investment allowance to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the investment allowance, if any, still outstanding shall be carried forward to the following assessment year and so on, so, however, that no portion of the investment allowance shall be carried forward for more than eight assessment years immediately succeeding the assessment year relevant to the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, as the case may be, the immediately succeeding previous year.
Explanation.—Where for any assessment year, investment allowance is to be allowed in accordance with the provisions of this sub-section in respect of any ship or aircraft acquired or any machinery or plant installed in more than one previous year, and the total income of the assessee assessable for that assessment year (the total income for this purpose being computed after deduction of the allowances under section 33 and section 33A, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VI-A) is less than the aggregate of the amounts due to be allowed in respect of the assets aforesaid for that assessment year, the following procedure shall be followed, namely :—
(a) the allowance under clause (ii) shall be made before any allowance under clause (i) is made; and
(b) where an allowance has to be made under clause (ii) in respect of amounts carried forward from more than one assessment year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year.
(4) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :—
(i) the particulars prescribed in this behalf have been furnished by the assessee in respect of the ship or aircraft or machinery or plant;
(ii) an amount equal to seventy-five per cent of the investment allowance to be actually allowed is debited to the profit and loss account of 25[any previous year in respect of which the deduction is to be allowed under sub-section (3) or any earlier previous year (being a previous year not earlier than the year in which the ship or aircraft was acquired or the machinery or plant was installed or the ship, aircraft, machinery or plant was first put to use)] and credited to a reserve account (to be called the “Investment Allowance Reserve Account” ) to be utilised—
(a) for the purposes of acquiring, before the expiry of a period of ten years next following the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, a new ship or a new aircraft or new machinery or plant [other than machinery or plant of the nature referred to in clauses (a), (b) and (d) of the 26[second] proviso to sub-section (1)] for the purposes of the business of the undertaking; and
(b) until the acquisition of a new ship or a new aircraft or new machinery or plant as aforesaid, for the purposes of the business of the undertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India:
Provided that this clause shall have effect in respect of a ship as if for the word “seventy-five”, the word “fifty” had been substituted.
Explanation.—Where the amount debited to the profit and loss account and credited to the Investment Allowance Reserve Account under this sub-section is not less than the amount required to be so credited on the basis of the amount of deduction in respect of investment allowance claimed in the return made by the assessee under section 139, but a higher deduction in respect of the investment allowance is admissible on the basis of the total income as proposed to be computed by the 27[Assessing] Officer under section 143, the 27[Assessing] Officer shall, by notice in writing in this behalf, allow the assessee an opportunity to credit within the time specified in the notice or within such further time as the 27[Assessing] Officer may allow, a further amount to the Investment Allowance Reserve Account out of the profits and gains of the previous year in which such notice is served on the assessee or of the immediately preceding previous year, if the accounts for that year have not been made up; and, if the assessee credits any further amount to such account within the time aforesaid, the amount so credited shall be deemed to have been credited to the Investment Allowance Reserve Account of the previous year in which the deduction is admissible and such amount shall not be taken into account in determining the adequacy of the reserve required to be created by the assessee in respect of the previous year in which such further credit is made:
Provided that such opportunity shall not be allowed by the 27[Assessing] Officer in a case where the difference in the total income as proposed to be computed by him and the total income as returned by the assessee arises out of the application of the proviso to sub-section (1) of section 145 or sub-section (2) of that section or the omission by the assessee to disclose his income fully and truly.
(5) Any allowance made under this section in respect of any ship, aircraft, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act—
(a) if the ship, aircraft, machinery or plant is sold or otherwise transferred28 by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired or installed; or
(b) if at any time before the expiry of ten years from the end of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, the assessee does not utilise the amount credited to the reserve account under sub-section (4) for the purposes of acquiring a new ship or a new aircraft or new machinery or plant [other than machinery or plant of the nature referred to in clauses (a), (b) and (d) of the 29[second] proviso to sub-section (1)] for the purposes of the business of the undertaking; or
(c) if at any time before the expiry of the ten years aforesaid, the assessee utilises the amount credited to the reserve account under sub-section (4) for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any assets outside India or for any other purpose which is not a purpose of the business of the undertaking,
and the provisions of sub-section (4A) of section 155 shall apply accordingly:
Provided that nothing in clause (a) shall apply—
(i) where the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 195630 (1 of 1956); or
(ii) where the sale or transfer of the ship, aircraft, machinery or plant is made in connection with the amalgamation or succession, referred to in sub-section (6) or sub-section (7).
(6) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any ship, aircraft, machinery or plant, in respect of which investment allowance has been allowed to the amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (4) in respect of the reserve created by the amalgamating company and in respect of the period within which such ship, aircraft, machinery or plant shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of sub-section (4A) of section 155 shall apply to the amalgamated company as they would have applied to the amalgamating company had it committed the default; and
(b) the balance of investment allowance, if any, still outstanding to the amalgamating company in respect of such ship, aircraft, machinery or plant, shall be allowed to the amalgamated company in accordance with the provisions of sub-section (3), so, however, that the total period for which the balance of investment allowance shall be carried forward in the assessments of the amalgamating company and the amalgamated company shall not exceed the period of eight years specified in sub-section (3) and the amalgamated company shall be treated as the assessee in respect of such ship, aircraft, machinery or plant for the purposes of this section.
(7) Where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any ship, aircraft, machinery or plant, the provisions of clauses (a) and (b) of sub-section (6) shall, so far as may be, apply to the firm and the company.
- —The provisions of this sub-section shall apply only where—
(i) all the property of the firm relating to the business immediately before the succession becomes the property of the company;
(ii) all the liabilities of the firm relating to the business immediately before the succession become the liabilities of the company; and
(iii) all the shareholders of the company were partners of the firm immediately before the succession.
(8) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed in respect of any ship or aircraft acquired or any machinery or plant installed after such date 31[***] as may be specified therein.
32[(8A) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, omit any article or thing from the list of articles or things specified in the Eleventh Schedule.]
33[(8B) Notwithstanding anything contained in sub-section (8) or the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. GSR 870(E), dated the 12th June, 1986, issued thereunder, the provisions of this section shall apply in respect of,—
(a) (i) a new ship or new aircraft acquired after the 31st day of March, 1987 but before the 1st day of April, 1988, if the assessee furnishes evidence to the satisfaction of the Assessing Officer that he had, before the 12th day of June, 1986, entered into a contract for the purchase of such ship or aircraft with the builder or manu-facturer or owner thereof, as the case may be;
(ii) any new machinery or plant installed after the 31st day of March, 1987 but before the 1st day of April, 1988, if the assessee furnishes evidence to the satisfaction of the Assessing Officer that before the 12th day of June, 1986, he had purchased such machinery or plant or had entered into a contract for the purchase of such machinery or plant with the manufacturer or owner of, or a dealer in, such machinery or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant:
Provided that nothing contained in sub-section (1) shall entitle the assessee to claim deduction in respect of a ship or aircraft or machinery or plant referred to in this clause in any previous year except the previous year relevant to the assessment year commencing on the 1st day of April, 1989;
(b) a new ship or new aircraft acquired or any new machinery or plant installed after the 31st day of March, 1988, but before such date as the Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette34, specify in this behalf.
(8C) Subject to the provisions of clause (ii) of sub-section (3), where a deduction has been allowed to an assessee under sub-section (1) in any assessment year, no deduction shall be allowed to the assessee under section 32AB in the said assessment year (hereinafter referred to as the initial assessment year) and a block of further period of four years beginning with the assessment year immediately succeeding the initial assessment year.]
(9) [Omitted by the Finance Act, 1990, w.r.e.f. 1-4-1976.]
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Section 32AB: 35[Investment deposit account.
- (1) Subject to the other provisions of this section, where an assessee, whose total income includes income chargeable to tax under the head “Profits and gains of business or profession”, has, out of such income,—
(a) deposited any amount in an account (hereafter in this section referred to as deposit account) maintained by him with the Development Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, which-ever is earlier; or
(b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a),
in accordance with, and for the purposes specified in, a scheme36 (hereafter in this section referred to as the scheme) to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea in India, to be approved in this behalf by the Tea Board, the assessee shall be allowed a deduction 37[(such deduction being allowed before the loss, if any, brought forward from earlier years is set off under section 72)] of—
(i) a sum equal to the amount, or the aggregate of the amounts, so deposited and any amount so utilised; or
(ii) a sum equal to twenty per cent of the profits of 38[***] business or profession as computed in the accounts of the assessee audited in accordance with sub-section (5),
whichever is less :
39[Provided that where such assessee is a firm, or any association of persons or any body of individuals, the deduction under this section shall not be allowed in the computation of the income of any partner, or as the case may be, any member of such firm, association of persons or body of individuals:]
40[Provided further that no such deduction shall be allowed in relation to the assessment year commencing on the 1st day of April, 1991, or any subsequent assessment year.]
(2) For the purposes of this section,—
(i) 41[***]
42[(ii) “new ship” or “new aircraft” includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India;
(iii) “new machinery or plant” includes machinery or plant which before its installation by the assessee was used outside India by any other person, if the following conditions are fulfilled, namely :—
(a) such machinery or plant was not, at any time previous to the date of such installation by the assessee, used in India;
(b) such machinery or plant is imported into India from any country outside India; and
(c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;
(iv) “Tea Board” means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953).]
(3) 43[The profits of business or profession of an assessee for the purposes of sub-section (1) shall] be an amount arrived at after deducting an amount equal to the depreciation computed in accordance with the provisions of sub-section (1) of section 32 from the amounts of profits computed in accordance with the requirements of Parts II and III of the 44[Schedule VI] to the Companies Act, 195645 (1 of 1956), 46[as increased by the aggregate of—
(i) the amount of depreciation;
(ii) the amount of income-tax paid or payable, and provision therefor;
(iii) the amount of surtax paid or payable under the Companies (Profits) Surtax Act, 1964 (7 of 1964);
(iv) the amounts carried to any reserves, by whatever name called;
(v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities;
(vi) the amount by way of provision for losses of subsidiary companies; and
(vii) the amount or amounts of dividends paid or proposed,
if any debited to the profit and loss account; and as reduced by any amount or amounts withdrawn from reserves or provisions, if such amounts are credited to the profit and loss account 47[***].]
48[***]
(4) No deduction under sub-section (1) shall be allowed in respect of any amount utilised for the purchase of—
(a) any machinery or plant to be installed in any office premises or residential accommodation, including any accommodation in the nature of a guest-house;
(b) any office appliances (not being computers);
(c) any road transport vehicles;
(d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year;
49[(e) any new machinery or plant to be installed in an industrial undertaking, other than a small-scale industrial undertaking, as defined in section 80HHA, for the purposes of business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule.]
(5) The deduction under sub-section (1) shall not be admissible50 unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form51 duly signed and verified by such accountant :
Provided that in a case where the assessee is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this sub-section if such assessee gets the accounts of such business or profession audited under such law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under this sub-section.
52[(5A) Any amount standing to the credit of the assessee in the deposit account shall not be allowed to be withdrawn before the expiry of a period of five years from the date of deposit except for the purposes specified in the scheme 53[or] in the circumstances specified below :—
(a) closure of business;
(b) death of an assessee;
(c) partition of a Hindu undivided family;
(d) dissolution of a firm;
(e) liquidation of a company.]
54[Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall affect the operation of the provisions of sub-section (5AA) or sub-section (6) in relation to any withdrawals made from the deposit account either before or after the expiry of a period of five years from the date of deposit.]
54[(5AA) Where any amount, standing to the credit of the assessee in the deposit account, is withdrawn during any previous year by the assessee in the circumstance specified in clause (a) or clause (d) of sub-section (5A), the whole of such amount shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year, as if the business had not closed or, as the case may be, the firm had not been dissolved.]
55[(5B) Where any amount standing to the credit of the assessee in the deposit account is utilised by the assessee for the purposes of any expenditure in connection with the 56[***] business or profession in accordance with the scheme, such expenditure shall not be allowed in computing the income chargeable under the head “Profits and gains of business or profession” .]
(6) Where any amount, standing to the credit of the assessee in the deposit account, released during any previous year by the Development Bank for being utilised by the assessee for the purposes specified in the scheme or at the closure of the account 57[[in circumstances other than the circumstances specified in clauses (b), (c) and (e) of sub-section (5A)]], is not utilised in accordance with 58[, and within the time specified in,] the scheme, either wholly or in part, 59[***] the whole of such amount or, as the case may be, part thereof which is not so utilised shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year.
(7) Where any asset acquired in accordance with the scheme is sold or otherwise transferred in any previous year by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired, such part of the cost of such asset as is relatable to the deductions allowed under sub-section (1) shall be deemed to be the profits and gains of business or profession of the previous year in which the asset is sold or otherwise transferred and shall accordingly be chargeable to income-tax as the income of that previous year:
Provided that nothing in this sub-section shall apply—
(i) where the asset is sold or otherwise transferred by the assessee to Government, a local authority, a corporation established by or under a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 195660 (1 of 1956); or
(ii) where the sale or transfer of the asset is made in connection with the succession of a firm by a company in the business or profession carried on by the firm as a result of which the firm sells or otherwise transfers to the company any asset and the scheme continues to apply to the company in the manner applicable to the firm.
Explanation.—The provisions of clause (ii) of the proviso shall apply only where—
(i) all the properties of the firm relating to the business or profession immediately before the succession become the properties of the company;
(ii) all the liabilities of the firm relating to the business or profession immediately before the succession become the liabilities of the company; and
(iii) all the shareholders of the company were partners of the firm immediately before the succession.
(8) The Central Government may, if it considers it necessary or expedient so to do, by notification in the Official Gazette, omit any article or thing from the list of articles or things specified in the Eleventh Schedule.
(9) The Central Government may, after making such inquiry as it may think fit, direct, by notification in the Official Gazette, that the provisions of this section shall not apply to any class of assessees, with effect from such date as it may specify in the notification.
61[(10) Where a deduction has been allowed to an assessee under this section in any assessment year, no deduction shall be allowed to the assessee under sub-section (1) of section 32A in the said assessment year (hereinafter referred to as the initial assessment year) and a block of further period of four years beginning with the assessment year immediately succeeding the initial assessment year].
- —In this section,—
(a) “computers” does not include calculating machines and calculating devices;
(b) “Development Bank” means—
(i) in the case of an assessee carrying on business of growing and manufacturing tea in India, the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981);
(ii) in the case of other assessees, the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964) and includes such bank or institution as may be specified in the scheme in this behalf.]
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Section 32AC: 62[Investment in new plant or machinery.
- (1) Where an assessee, being a company, engaged in the business of manufacture or production of any article or thing, acquires and installs new asset after the 31st day of March, 2013 but before the 1st day of April, 2015 and the aggregate amount of actual cost of such new assets exceeds one hundred crore rupees, then, there shall be allowed a deduction,—
(a) for the assessment year commencing on the 1st day of April, 2014, of a sum equal to fifteen per cent of the actual cost of new assets acquired and installed after the 31st day of March, 2013 but before the 1st day of April, 2014, if the aggregate amount of actual cost of such new assets exceeds one hundred crore rupees; and
(b) for the assessment year commencing on the 1st day of April, 2015, of a sum equal to fifteen per cent of the actual cost of new assets acquired and installed after the 31st day of March, 2013 but before the 1st day of April, 2015, as reduced by the amount of deduction allowed, if any, under clause (a).
The following sub-sections (1A) and (1B) shall be inserted after sub-section (1) of section 32AC by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(1A) Where an assessee, being a company, engaged in the business of manufacture or production of any article or thing, acquires and installs new assets and the amount of actual cost of such new assets acquired and installed during any previous year exceeds twenty-five crore rupees, then, there shall be allowed a deduction of a sum equal to fifteen per cent of the actual cost of such new assets for the assessment year relevant to that previous year:
Provided that no deduction under this sub-section shall be allowed for the assessment year commencing on the 1st day of April, 2015 to the assessee, which is eligible to claim deduction under sub-section (1) for the said assessment year.
(1B) No deduction under sub-section (1A) shall be allowed for any assessment year commencing on or after the 1st day of April, 2018.
(2) If any new asset acquired and installed by the assessee is sold or otherwise transferred, except in connection with the amalgamation or demerger, within a period of five years from the date of its installation, the amount of deduction allowed under sub-section (1) 62a[or sub-section (1A)] in respect of such new asset shall be deemed to be the income of the assessee chargeable under the head “Profits and gains of business or profession” of the previous year in which such new asset is sold or otherwise transferred, in addition to taxability of gains, arising on account of transfer of such new asset.
(3) Where the new asset is sold or otherwise transferred in connection with the amalgamation or demerger within a period of five years from the date of its installation, the provisions of sub-section (2) shall apply to the amalgamated company or the resulting company, as the case may be, as they would have applied to the amalgamating company or the demerged company.
(4) For the purposes of this section, “new asset” means any new plant or machinery (other than ship or aircraft) but does not include—
(i) any plant or machinery which before its installation by the assessee was used either within or outside India by any other person;
(ii) any plant or machinery installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house;
(iii) any office appliances including computers or computer software;
(iv) any vehicle; or
(v) any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any previous year.]
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Section 33: Development rebate.
- 63[(1)(a) In respect of a new ship64 or new machinery or plant (other than office appliances or road transport vehicles) which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section and of section 34, be allowed a deduction, in respect of the previous year in which the ship was acquired or the machinery or plant was installed or, if the ship, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, a sum by way of development rebate as specified in clause (b).
(b) The sum referred to in clause (a) shall be—
(A) in the case of a ship, forty per cent of the actual cost thereof to the assessee;
(B) in the case of machinery or plant,—
(i) where the machinery or plant is installed for the purposes of business of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule,—
(a) thirty-five per cent of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and
(b) twenty-five per cent of such cost, where it is installed after the 31st day of March, 1970;
(ii) where the machinery or plant is installed after the 31st day of March, 1967, by an assessee being an Indian company in premises used by it as a hotel and such hotel is for the time being approved in this behalf by the Central Government,—
(a) thirty-five per cent of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and
(b) twenty-five per cent of such cost, where it is installed after the 31st day of March, 1970;
(iii) where the machinery or plant is installed after the 31st day of March, 1967, being an asset representing expenditure of a capital nature on scientific research related to the business carried on by the assessee,—
(a) thirty-five per cent of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and
(b) twenty-five per cent of such cost, where it is installed after the 31st day of March, 1970;
(iv) in any other case,—
(a) twenty per cent of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and
(b) fifteen per cent of such cost, where it is installed after the 31st day of March, 1970.]
65[66(1A)(a) An assessee who, after the 31st day of March, 1964, acquires any ship which before the date of acquisition by him was used by any other person shall, subject to the provisions of section 34, also be allowed as a deduction a sum by way of development rebate at such rate or rates as may be prescribed, provided that the following conditions are fulfilled, namely :—
(i) such ship was not previous to the date of such acquisition owned at any time by any person resident in India;
(ii) such ship is wholly used for the purposes of the business carried on by the assessee; and
(iii) such other conditions as may be prescribed.
(b) An assessee who installs any machinery or plant (other than office appliances or road transport vehicles) which before such installation by the assessee was used outside India by any other person shall, subject to the provisions of section 34, also be allowed as a deduction a sum by way of development rebate at such rate or rates as may be prescribed, provided that the following conditions are fulfilled, namely :—
(i) such machinery or plant was not used in India at any time previous to the date of such installation by the assessee;
(ii) it is imported in India by the assessee from any country outside India;
(iii) no deduction on account of depreciation or development rebate in respect of such machinery or plant has been allowed or is allowable under the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee;
(iv) such machinery or plant is wholly used for the purposes of the business carried on by the assessee; and
(v) such other conditions as may be prescribed.
(c) The development rebate under this sub-section shall be allowed as a deduction in respect of the previous year in which the ship was acquired or the machinery or plant was installed or, if the ship, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year.]
(2) In the case of a ship acquired or machinery or plant installed after the 31st day of December, 1957, where the total income of the assessee assessable for the assessment year relevant to the previous year in which the ship was acquired or the machinery or plant installed or the immediately succeeding previous year, as the case may be (the total income for this purpose being computed without making any allowance under sub-section (1) 67[or sub-section (1A)] 68[of this section or sub-section (1) of section 33A] 69[or any deduction under Chapter VI-A 70[***]]) is nil or is less than the full amount of the development rebate calculated at the rate applicable thereto under 71[sub-section (1) or sub-section (1A), as the case may be],—
(i) the sum to be allowed by way of development rebate for that assessment year under sub-section (1) 72[or sub-section (1A)] shall be only such amount as is sufficient to reduce the said total income to nil ; and
(ii) the amount of the development rebate, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development rebate to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the development rebate, if any, still outstanding shall be carried forward to the following assessment year and so on, so however, that no portion of the development rebate shall be carried forward for more than eight assessment years immediately succeeding the assessment year relevant to the previous year in which the ship was acquired or the machinery or plant installed or the immediately succeeding previous year, as the case may be.
Explanation.—Where for any assessment year development rebate is to be allowed in accordance with the provisions of sub-section (2) in respect of ships acquired or machinery or plant installed in more than one previous year, and the total income of the assessee assessable for that assessment year (the total income for this purpose being computed without making any allowance under sub-section (1) 73[or sub-section (1A)] 74[of this section or sub-section (1) of section 33A] 75[or any deduction under Chapter VI-A 76[***]]) is less than the aggregate of the amounts due to be allowed in respect of the assets aforesaid for that assessment year, the following procedure shall be followed, namely :—
(i) the allowance under clause (ii) of sub-section (2) shall be made before any allowance under clause (i) of that sub-section is made; and
(ii) where an allowance has to be made under clause (ii) of sub-section (2) in respect of amounts carried forward from more than one assessment year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year.
77[(3) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any ship, machinery or plant in respect of which development rebate has been allowed to the amalgamating company under sub-section (1) or sub-section (1A),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (3) of section 34 in respect of the reserve created by the amalgamating company and in respect of the period within which such ship, machinery or plant shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of sub-section (5) of section 155 shall apply to the amalgamated company as they would have applied to the amalgamating company had it committed the default; and
(b) the balance of development rebate, if any, still outstanding to the amalgamating company in respect of such ship, machinery or plant shall be allowed to the amalgamated company in accordance with the provisions of sub-section (2), so, however, that the total period for which the balance of development rebate shall be carried forward in the assessments of the amalgamating company and the amalgamated company shall not exceed the period of eight years specified in sub-section (2) and the amalgamated company shall be treated as the assessee in respect of such ship, machinery or plant for the purposes of this section and section 34.]
(4) Where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any ship, machinery or plant, the provisions of clauses (a) and (b) of sub-section (3) shall, so far as may be, apply to the firm and the company.
Explanation.—The provisions of this clause shall apply only where—
(i) all the property of the firm relating to the business immediately before the succession becomes the property of the company;
(ii) all the liabilities of the firm relating to the business immediately before the succession become the liabilities of the company; and
(iii) all the shareholders of the company were partners of the firm immediately before the succession.
78[(5) The Central Government, if it considers it necessary or expedient so to do, may, by notification79 in the Official Gazette, direct that the deduction allowable under this section shall not be allowed in respect of a ship acquired or machinery or plant installed after such date, not being earlier than three years from the date of such notification, as may be specified therein.]
80[(6) Notwithstanding anything contained in the foregoing provisions of this section, no deduction by way of development rebate shall be allowed in respect of any machinery or plant installed after the 31st day of March, 1965, in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house:]
81[Provided that the provisions of this sub-section shall not apply in the case of an assessee being an Indian company, in respect of any machinery or plant installed by it in premises used by it as a hotel, where the hotel is for the time being approved in this behalf by the Central Government.]
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Section 33A: 82[Development allowance.
8333A. (1) In respect of planting of tea bushes on any land in India owned by an assessee who carries on business of growing and manufacturing tea in India, a sum by way of development allowance equivalent to—
(i) where tea bushes have been planted on any land not planted at any time with tea bushes or on any land which had been previously abandoned, 84[fifty] per cent of the actual cost of planting; and
(ii) where tea bushes are planted in replacement of tea bushes that have died or have become permanently useless on any land already planted, 85[thirty] per cent of the actual cost of planting,
shall, subject to the provisions of this section, be allowed as a deduction 86[in the manner specified hereunder, namely :—
(a) the amount of the development allowance shall, in the first instance, be computed with reference to that portion of the actual cost of planting which is incurred during the previous year in which the land is prepared for planting or replanting, as the case may be, and in the previous year next following, and the amount so computed shall be allowed as a deduction in respect of such previous year next following; and
(b) thereafter, the development allowance shall again be computed with reference to the actual cost of planting, and if the sum so computed exceeds the amount allowed as a deduction under clause (a), the amount of the excess shall be allowed as a deduction in respect of the third succeeding previous year next following the previous year in which the land has been prepared for planting or replanting, as the case may be :]
87[Provided that no deduction under clause (i) shall be allowed unless the planting has commenced after the 31st day of March, 1965, and been completed before the 1st day of April, 1990 :
Provided further that no deduction shall be allowed under clause (ii) unless the planting has commenced after the 31st day of March, 1965, and been completed before the 1st day of April, 1970.]
(2) Where the total income of the assessee assessable for the assessment year relevant to 88[the previous year in respect of which the deduction is required to be allowed under sub-section (1)] 89[(the total income for this purpose being computed after deduction of the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VI-A 90[***])] is nil or is less than the full amount of the development allowance calculated at the rates 91[and in the manner] specified in sub-section (1)—
(i) the sum to be allowed by way of development allowance for that assessment year under sub-section (1) shall be only such amount as is sufficient to reduce the said total income to nil ; and
(ii) the amount of the development allowance, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development allowance to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the development allowance, if any, still outstanding shall be carried forward to the following assessment year and so on, so, however, that no portion of the development allowance shall be carried forward for more than eight assessment years immediately succeeding the assessment year in which the deduction was first allowable.
Explanation.—Where for any assessment year development allowance is to be allowed in accordance with the provisions of sub-section (2) in respect of more than one previous year, and the total income of the assessee assessable for that assessment year 92[(the total income for this purpose being computed after deduction of the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33, but without making any deduction under sub-section (1) of this section or any deduction under Chapter VI-A 93[***])] is less than the amount of the development allowance due to be made in respect of that assessment year, the following procedure shall be followed, namely :—
(i) the allowance under clause (ii) of sub-section (2) of this section shall be made before any allowance under clause (i) of that sub-section is made; and
(ii) where an allowance has to be made under clause (ii) of sub-section (2) of this section in respect of amounts carried forward from more than one assessment year, the amount carried forward from an earlier assessment year shall be allowed before any amount carried forward from a later assessment year.
(3) The deduction under sub-section (1) shall be allowed only if the following conditions are fulfilled, namely :—
(i) the particulars prescribed94 in this behalf have been furnished by the assessee;
(ii) an amount equal to seventy-five per cent of the development allowance to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve account to be utilised by the assessee during a period of eight years next following for the purposes of the business of the undertaking, other than—
(a) for distribution by way of dividends or profits; or
(b) for remittance outside India as profits or for the creation of any asset outside India; and
(iii) such other conditions as may be prescribed.
(4) If any such land is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which the deduction under sub-section (1) was allowed, any allowance under this section shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5A) of section 155 shall apply accordingly :
Provided that this sub-section shall not apply—
(i) where the land is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act, or a Government company as defined in section 617 of the Companies Act, 195695 (1 of 1956); or
(ii) where the sale or transfer of the land is made in connection with the amalgamation or succession referred to in sub-section (5) or sub-section (6).
96[(5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any land in respect of which development allowance has been allowed to the amalgamating company under sub-section (1),—
(a) the amalgamated company shall continue to fulfil the conditions mentioned in sub-section (3) in respect of the reserve created by the amalgamating company and in respect of the period within which such land shall not be sold or otherwise transferred and in default of any of these conditions, the provisions of sub-section (5A) of section 155 shall apply to the amalgamated company as they would have applied to the amalgamating company had it committed the default; and
(b) the balance of development allowance, if any, still outstanding to the amalgamating company in respect of such land shall be allowed to the amalgamated company in accordance with the provisions of sub-section (2), so, however, that the total period for which the balance of development allowance shall be carried forward in the assessments of the amalgamating company and the amalgamated company shall not exceed the period of eight years specified in sub-section (2) and the amalgamated company shall be treated as the assessee in respect of such land for the purposes of this section.]
(6) Where a firm is succeeded to by a company in the business carried on by it as a result of which the firm sells or otherwise transfers to the company any land on which development allowance has been allowed, the provisions of clauses (a) and (b) of sub-section (5) shall, so far as may be, apply to the firm and the company.
Explanation.—The provisions of this sub-section shall apply if the conditions laid down in the Explanation to sub-section (4) of section 33 are fulfilled.
(7) For the purposes of this section, “actual cost of planting” means the aggregate of—
(i) the cost of preparing the land;
(ii) the cost of seeds, cutting and nurseries;
(iii) the cost of planting and replanting; and
(iv) the cost of upkeep thereof for the previous year in which the land has been prepared and the three successive previous years next following such previous year,
reduced by that portion of the cost, if any, as has been met directly or indirectly by any other person or authority:
97[Provided that where such cost exceeds—
(i) forty thousand rupees per hectare in respect of land situate in a hilly area comprised in the district of Darjeeling; or
(ii) thirty-five thousand rupees per hectare in respect of land situate in a hilly area comprised in an area other than the district of Darjeeling; or
(iii) thirty thousand rupees per hectare in any other area,
then, the excess shall be ignored.
Explanation.—For the purposes of this proviso, “district of Darjeeling” means the district of Darjeeling as on the 28th day of February, 1981, being the date of introduction of the Finance Bill, 1981, in the House of the People.]
(8) The Board may, having regard to the elevation and topography, by general or special order, declare any areas to be 98hilly areas for the purposes of this section and such order shall not be questioned before any court of law or any other authority.
99[Explanation.—For the purposes of this section, an assessee having a leasehold or other right of occupancy in any land shall be deemed to own such land and where the assessee transfers such right, he shall be deemed to have sold or otherwise transferred such land.]
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Section 33AB: 1[Tea development account 2[,coffee development account and rubber development account].
- (1) Where an assessee carrying on business of growing and manufacturing tea 2[or coffee or rubber] in India has, before the expiry of six months from the end of the previous year or before 2[the due date of] furnishing the return of his income, 3[whichever is earlier,—
(a) deposited with the National Bank any amount or amounts in an account (hereafter in this section referred to as the special account) maintained by the assessee with that Bank in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme) approved in this behalf by the Tea Board 4[or the Coffee Board or the Rubber Board] ; or
(b) 5[deposited any amount in an account (hereafter in this section referred to as the Deposit Account) opened by the assessee in accordance with, and for the purposes specified in, a scheme framed by the Tea Board or the Coffee Board or the Rubber Board, as the case may be (hereafter in this section referred to as the deposit scheme), with the previous approval of the Central Government,]
the assessee shall, subject to the provisions of this section,] be allowed a deduction (such deduction being allowed before the loss, if any, brought forward from earlier years is set off under section 72) of—
(a) a sum equal to the amount or the aggregate of the amounts so deposited ; or
(b) a sum equal to 6[forty] per cent of the profits of such business (computed under the head “Profits and gains of business or profession” before making any deduction under this section),
whichever is less :
Provided that where such assessee is a firm, or any association of persons or any body of individuals, the deduction under this section shall not be allowed in the computation of the income of any partner, or as the case may be, any member of such firm, association of persons or body of individuals :
Provided further that where any deduction, in respect of any amount deposited in the special account 7[, or in the 8[***] Deposit Account], has been allowed under this sub-section in any previous year, no deduction shall be allowed in respect of such amount in any other previous year.
(2) The deduction under sub-section (1) shall not be admissible unless the accounts of such business of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form9 duly signed and verified by such accountant :
Provided that in a case where the assessee is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this sub-section if such assessee gets the accounts of such business audited under such law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under this sub-section.
(3) Any amount standing to the credit of the assessee in 10[the special account or the 11[***] Deposit Account shall not be allowed to be withdrawn except for the purposes specified in the scheme or, as the case may be, in the deposit scheme] or in the circumstances specified below :—
(a) closure of business ;
(b) death of an assessee ;
(c) partition of a Hindu undivided family ;
(d) dissolution of a firm ;
(e) liquidation of a company.
12[(4) Notwithstanding anything contained in sub-section (3), where any amount standing to the credit of the assessee in the special account or in the Deposit Account is released during any previous year by the National Bank or withdrawn by the assessee from the Deposit Account, and such amount is utilised for the purchase of—
(a) any machinery or plant to be installed in any office premises or residential accommodation, including any accommodation in the nature of a guest-house;
(b) any office appliances (not being computers);
(c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year;
(d) any new machinery or plant to be installed in an industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule,
the whole of such amount so utilised shall be deemed to be the profits and gains of business of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year.]
(5) Where any amount, standing to the credit of the assessee in the special account 13[or in the 14[***] Deposit Account], is withdrawn during any previous year by the assessee in the circumstance specified in clause (a) or clause (d) of sub-section (3), the whole of such amount shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year, as if the business had not closed or, as the case may be, the firm had not been dissolved.
(6) Where any amount standing to the credit of the assessee in the special account 15[or in the 14[***] Deposit Account] is utilised by the assessee for the purposes of any expenditure in connection with such business in accordance with the scheme 15[or the deposit scheme], such expenditure shall not be allowed in computing the income chargeable under the head “Profits and gains of business or profession” .
(7) Where any amount, standing to the credit of the assessee in the special account 16[or in the 17[***] Deposit Account], which is released during any previous year by the National Bank 16[or which is withdrawn by the assessee from the 17[***] Deposit Account] for being utilised by the assessee for the purposes of such business in accordance with the scheme 16[or the deposit scheme] is not so utilised, either wholly or in part, within that previous year, the whole of such amount or, as the case may be, part thereof which is not so utilised shall be deemed to be profits and gains of business and accordingly chargeable to income-tax as the income of that previous year :
Provided that this sub-section shall not apply in a case where such amount is released during any previous year at the closure of the account in circumstances specified in clauses (b), (c) and (e) of sub-section (3).
(8) Where any asset acquired in accordance with the scheme 16[or the deposit scheme] is sold or otherwise transferred in any previous year by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired, such part of the cost of such asset as is relatable to the deduction allowed under sub-section (1) shall be deemed to be the profits and gains of business or profession of the previous year in which the asset is sold or otherwise transferred and shall accordingly be chargeable to income-tax as the income of that previous year :
Provided that nothing in this sub-section shall apply—
(i) where the asset is sold or otherwise transferred by the assessee to Government, a local authority, a corporation established by or under a Central, State or Provincial Act or a Government company18 as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; or
(ii) where the sale or transfer of the asset is made in connection with the succession of a firm by a company in the business or profession carried on by the firm as a result of which the firm sells or otherwise transfers to the company any asset and the scheme 19[or the deposit scheme] continues to apply to the company in the manner applicable to the firm.
- —The provisions of clause (ii) of the proviso shall apply only where—
(i) all the properties of the firm relating to the business or profession immediately before the succession become the properties of the company ;
(ii) all the liabilities of the firm relating to the business or profession immediately before the succession become the liabilities of the company ; and
(iii) all the shareholders of the company were partners of the firm immediately before the succession.
(9) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed after such date as may be specified therein.
- —In this section,—
20[(a) “Coffee Board” means the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942);
(aa) “National Bank” means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981);
(ab) “Rubber Board” means the Rubber Board constituted under sub-section (1) of section 4 of the Rubber Act, 1947 (24 of 1947);]
(b) “Tea Board” means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953).]
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Section 33ABA: 21[Site Restoration Fund.22
- (1) Where an assessee is carrying on business consisting of the prospecting for, or extraction or production of, petroleum or natural gas or both in India and in relation to which the Central Government has entered into an agreement with such assessee for such business, has before the end of the previous year—
(a) deposited with the State Bank of India any amount or amounts in an account (hereafter in this section referred to as the special account) maintained by the assessee with that Bank in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme) approved in this behalf by the Government of India in the Ministry of Petroleum and Natural Gas; or
(b) deposited any amount in an account (hereafter in this section referred to as the Site Restoration Account) opened by the assessee in accordance with, and for the purposes specified in, a scheme framed by the Ministry referred to in clause (a) (hereafter in this section referred to as the deposit scheme),
the assessee shall, subject to the provisions of this section, be allowed a deduction (such deduction being allowed before the loss, if any, brought forward from earlier years is set off under section 72) of—
(i) a sum equal to the amount or the aggregate of the amounts so deposited; or
(ii) a sum equal to twenty per cent of the profits of such business (computed under the head “Profits and gains of business or profession” before making any deduction under this section),
whichever is less :
Provided that where such assessee is a firm, or any association of persons or any body of individuals, the deduction under this section shall not be allowed in the computation of the income of any partner or, as the case may be, any member of such firm, association of persons or body of individuals :
Provided further that where any deduction, in respect of any amount deposited in the special account, or in the Site Restoration Account, has been allowed under this sub-section in any previous year, no deduction shall be allowed in respect of such amount in any other previous year :
Provided also that any amount credited in the special account or the Site Restoration Account by way of interest shall be deemed to be a deposit.
(2) The deduction under sub-section (1) shall not be admissible unless the accounts of such business of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form23 duly signed and verified by such accountant :
Provided that in a case where the assessee is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this sub-section if such assessee gets the accounts of such business audited under such law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under this sub-section.
(3) Any amount standing to the credit of the assessee in the special account or the Site Restoration Account shall not be allowed to be withdrawn except for the purposes specified in the scheme or, as the case may be, in the deposit scheme.
(4) Notwithstanding anything contained in sub-section (3), no deduction under sub-section (1) shall be allowed in respect of any amount utilised for the purchase of—
(a) any machinery or plant to be installed in any office premises or residential accommodation, including any accommodation in the nature of a guest-house;
(b) any office appliances (not being computers);
(c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any one previous year;
(d) any new machinery or plant to be installed in an industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule.
(5) Where any amount standing to the credit of the assessee in the special account or in the Site Restoration Account is withdrawn on closure of the account during any previous year by the assessee, the amount so withdrawn from the account, as reduced by the amount, if any, payable to the Central Government by way of profit or production share as provided in the agreement referred to in section 42, shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year.
Explanation.—Where any amount is withdrawn on closure of the account in a previous year in which the business carried on by the assessee is no longer in existence, the provisions of this sub-section shall apply as if the business is in existence in that previous year.
(6) Where any amount standing to the credit of the assessee in the special account or in the Site Restoration Account is utilised by the assessee for the purposes of any expenditure in connection with such business in accordance with the scheme or the deposit scheme, such expenditure shall not be allowed in computing the income chargeable under the head “Profits and gains of business or profession” .
(7) Where any amount, standing to the credit of the assessee in the special account or in the Site Restoration Account, which is released during any previous year by the State Bank of India or which is withdrawn by the assessee from the Site Restoration Account for being utilised by the assessee for the purposes of such business in accordance with the scheme or the deposit scheme is not so utilised, either wholly or in part, within that previous year, the whole of such amount or, as the case may be, part thereof which is not so utilised shall be deemed to be profits and gains of business and accordingly chargeable to income-tax as the income of that previous year.
24[***]
(8) Where any asset acquired in accordance with the scheme or the deposit scheme is sold or otherwise transferred in any previous year by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired, such part of the cost of such asset as is relatable to the deduction allowed under sub-section (1) shall be deemed to be the profits and gains of business or profession of the previous year in which the asset is sold or otherwise transferred and shall accordingly be chargeable to income-tax as the income of that previous year :
Provided that nothing in this sub-section shall apply—
(i) where the asset is sold or otherwise transferred by the assessee to Government, a local authority, a corporation established by or under a Central, State or Provincial Act or a Government company25 as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(ii) where the sale or transfer of the asset is made in connection with the succession of a firm by a company in the business or profession carried on by the firm as a result of which the firm sells or otherwise transfers to the company any asset and the scheme or the deposit scheme continues to apply to the company in the manner applicable to the firm.
Explanation.—The provisions of clause (ii) of the proviso shall apply only where—
(i) all the properties of the firm relating to the business or profession immediately before the succession become the properties of the company;
(ii) all the liabilities of the firm relating to the business or profession immediately before the succession become the liabilities of the company; and
(iii) all the shareholders of the company were partners of the firm immediately before the succession.
(9) The Central Government may, if it considers necessary or expedient so to do, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed after such date as may be specified therein.
Explanation.—For the purposes of this section,—
(a) “State Bank of India” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);
(b) the expression “amount standing to the credit of the assessee in the special account or the Site Restoration Account” includes interest accrued to such accounts.]
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Section 33AC: 26[Reserves for shipping business.
- (1) 27[In the case of an assessee, being a Government company or a public company formed and registered in India with the main object of carrying on the business of operation of ships, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount not exceeding fifty per cent of profits derived from the business of operation of ships (computed under the head “Profits and gains of business or profession” and before making any deduction under this section), as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account, to be utilised in the manner laid down in sub-section (2) :]
28[Provided that where the aggregate of the amounts carried to such reserve account from time to time exceeds twice the aggregate of the amounts of the paid-up share capital, the general reserves and amount credited to the share premium account of the assessee, no allowance under this sub-section shall be made in respect of such excess :]
29[Provided further that for five assessment years commencing on or after the 1st day of April, 2001 and ending before the 1st day of April, 2006, the provisions of this sub-section shall have effect as if for the words “an amount not exceeding fifty per cent of profits”, the words “an amount not exceeding the profits” had been substituted:]
30[Provided also that no deduction shall be allowed under this section for any assessment year commencing on or after the 1st day of April, 2005.]
(2) The amount credited to the reserve account under sub-section (1) shall be utilised by the assessee before the expiry of a period of eight years next following the previous year in which the amount was credited—
(a) for acquiring a new ship for the purposes of the business of the assessee ; and
(b) until the acquisition of a new ship, for the purposes of the business of the assessee other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India.
(3) Where any amount credited to the reserve account under sub-section (1),—
(a) has been utilised for any purpose other than that referred to in clause (a) or clause (b) of sub-section (2), the amount so utilised ; or
(b) has not been utilised for the purpose specified in clause (a) of sub-section (2), the amount not so utilised ; or
(c) has been utilised for the purpose of acquiring a new ship as specified in clause (a) of sub-section (2), but such ship is sold or otherwise transferred 31[, other than in any scheme of demerger] by the asses-see to any person at any time before the expiry of 32[three] years from the end of the previous year in which it was acquired, the amount so utilised in acquiring the ship,
shall be deemed to be the profits,—
(i) in a case referred to in clause (a), in the year in which the amount was so utilised ; or
(ii) in a case referred to in clause (b), in the year immediately following the period of eight years specified in sub-section (2) ; or
(iii) in a case referred to in clause (c), in the year in which the sale or transfer took place,
and shall be charged to tax accordingly.
33[(4) Where the ship is sold or otherwise transferred (other than in any scheme of demerger) after the expiry of the period specified in clause (c) of sub-section (3) and the sale proceeds are not utilised for the purpose of acquiring a new ship within a period of one year from the end of the previous year in which such sale or transfer took place, 34[so much of such sale proceeds which represent the amount credited to the reserve account and utilised for the purposes mentioned in clause (c) of sub-section (3)] shall be deemed to be the profits of the assessment year immediately following the previous year in which the ship is sold or transferred.]
- —For the purposes of this section,—
(a) 35“public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956) ;
36[(aa) 37“Government company” shall have the meaning assigned to it in section 617 of the Companies Act, 1956 (1 of 1956) ;]
(b) “new ship” shall have the same meaning as in clause (ii) of sub-section (2) of section 32AB.]
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Section 33B: 38[Rehabilitation allowance.
- Where the business of any industrial undertaking carried on in India is discontinued in any previous year by reason of extensive damage to, or destruction of, any building, machinery, plant or furniture owned by the assessee and used for the purposes of such business as a direct result of—
(i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature ; or
(ii) riot or civil disturbance ; or
(iii) accidental fire or explosion ; or
(iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war),
and, thereafter, at any time before the expiry of three years from the end of such previous year, the business is re-established, reconstructed or revived by the assessee, he shall, in respect of the previous year in which the business is so re-established, reconstructed or revived, be allowed a deduction of a sum by way of rehabilitation allowance equivalent to sixty per cent of the amount of the deduction allowable to him under clause (iii) of sub-section (1) of section 32 in respect of the building, machinery, plant or furniture so damaged or destroyed :
39[Provided that no deduction under this section shall be allowed in relation to the assessment year commencing on the 1st day of April, 1985, or any subsequent assessment year.]
- —In this section, “industrial undertaking” means any undertaking 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.]
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Section 34: Conditions for depreciation allowance and development rebate.
- (1) 40[***]
(2) 41[***]
(3)(a) The deduction referred to in section 33 shall not be allowed unless an amount equal to seventy-five per cent of the development rebate to be actually allowed is debited to the profit and loss account of 42[any previous year in respect of which the deduction is to be allowed under sub-section (2) of that section or any earlier previous year (being a previous year not earlier than the year in which the ship was acquired or the machinery or plant was installed or the ship, machinery or plant was first put to use)] and credited to a reserve account to be utilised by the assessee during a period of eight years next following for the purposes of the business of the undertaking, other than—
(i) for distribution by way of dividends or profits ; or
(ii) for remittance outside India as profits or for the creation of any asset outside India :
Provided that this clause shall not apply where the assessee is a company, being a licensee within the meaning of the Electricity (Supply) Act, 1948 (54 of 1948)43, or where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1958 :
44[Provided further that where a ship has been acquired after the 28th day of February, 1966, this clause shall have effect in respect of such ship as if for the words “seventy-five”, the word “fifty” had been substituted.]
- —[Omitted by the Finance Act, 1990, w.r.e.f. 1-4-1962. Earlier, it was inserted by the Finance Act, 1966, w.r.e.f. 1-4-1962.]
(b) If any ship, machinery or plant is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired or installed, any allowance made under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of that ship, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5) of section 155 shall apply accordingly :
Provided that this clause shall not apply—
(i) where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1958 ; or
(ii) where the ship, machinery or plant is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act or a 45Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; or
(iii) where the sale or transfer of the ship, machinery or plant is made in connection with the amalgamation or succession, referred to in sub-section (3) or sub-section (4) of section 33.
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Section 34A: 46[Restriction on unabsorbed depreciation and unabsorbed investment allowance for limited period in case of certain domestic companies.
- (1) In computing the profits and gains of the business of a domestic company in relation to the previous year relevant to the assessment year commencing on the 1st day of April, 1992, where effect is to be given to the unabsorbed depreciation allowance or unabsorbed investment allowance or both in relation to any previous year relevant to the assessment year commencing on or before the 1st day of April, 1991, the deduction shall be restricted to two-third of such allowance or allowances and the balance,—
(a) where it relates to depreciation allowance, be added to the depreciation allowance for the previous year relevant to the assessment year commencing on the 1st day of April, 1993 and be deemed to be part of that allowance or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year and so on for the succeeding previous years ;
(b) where it relates to investment allowance, be carried forward to the assessment year commencing on the 1st day of April, 1993 and the balance of the investment allowance, if any, still outstanding shall be carried forward to the following assessment year and where the period of eight years has expired before the portion of such balance is adjusted, the said period shall be extended beyond eight years till such time the portion of the said balance is absorbed in the profits and gains of the business of the domestic company.
(2) For the assessment year commencing on the 1st day of April, 1992, the provisions of sub-section (2) of section 32 and sub-section (3) of section 32A shall apply to the extent such provisions are not inconsistent with the provisions of sub-section (1) of this section.
(3) Nothing contained in sub-section (1) shall apply where the amount of unabsorbed depreciation allowance or of the unabsorbed investment allowance, as the case may be, or the aggregate amount of such allowances in the case of a domestic company is less than one lakh rupees.
(4) Nothing contained in sections 234B and 234C shall apply to any shortfall in the payment of any tax due on the assessed tax or, as the case may be, returned income where such shortfall is on account of restricting the amount of depreciation allowance or investment allowance under this section and the assessee has paid the amount of shortfall before furnishing the return of income under sub-section (1) of section 139.]
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Section 35: 47[Expenditure on scientific research.
- 48 (1) In respect of expenditure on scientific research, the following deductions shall be allowed—
(i) any expenditure (not being in the nature of capital expenditure) laid out or expended on scientific research related to the 49business.
50[Explanation.—Where any such expenditure has been laid out or expended before the commencement of the business (not being expenditure laid out or expended before the 1st day of April, 1973) on payment of any salary [as defined in Explanation 251 below sub-section (5) of section 40A] to an employee engaged in such scientific research or on the purchase of materials used in such scientific research, the aggregate of the expenditure so laid out or expended within the three years immediately preceding the commencement of the business shall, to the extent it is certified by the prescribed authority52 to have been laid out or expended on such scientific research, be deemed to have been laid out or expended in the previous year in which the business is commenced ;]
53(ii) 54[an amount equal to 55[one and three-fourth] times of any sum paid] to a 56[research association] which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research :
57[Provided that such association, university, college or other institution for the purposes of this clause—
(A) is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be pres-cribed; and
(B) such association, university, college or other institution is specified as such, by notification58 in the Official Gazette, by the Central Government;]
59[(iia) an amount equal to one and one-fourth times of any sum paid to a company to be used by it for scientific research:
Provided that such company—
(A) is registered in India,
(B) has as its main object the scientific research and development,
(C) is, for the purposes of this clause, for the time being approved by the prescribed authority in the prescribed manner, and
(D) fulfils such other conditions as may be prescribed60;]
61[62(iii) 63[an amount equal to one and one-fourth times of 64[any sum paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university]], college or other institution to be used for research in social science or statistical research :
65[Provided that 66[such association, university], college or other institution for the purposes of this clause—
(A) is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be pres-cribed; and
(B) 66[such association, university], college or other institution is specified as such, by notification67 in the Official Gazette, by the Central Government.]
68[Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a 69[research association], university, college or other institution to which clause (ii) or clause (iii) applies, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to the association, university, college or other institution referred to in clause (ii) or clause (iii) has been withdrawn;]
(iv) in respect of any expenditure of a capital nature on scientific research related to the business carried on by the assessee, such deduction as may be admissible under the provisions of sub-section (2) :
70[Provided that the 69[research association], university, college or other institution referred to in clause (ii) or clause (iii) shall make an application in the prescribed form and manner to the 71[Central Government] for the purpose of grant of approval, or continuance thereof, under clause (ii) or, as the case may be, clause (iii) :
Provided further that the 71[Central Government] may, before granting approval under clause (ii) or clause (iii), call for such documents (including audited annual accounts) or information from the 69[research association], university, college or other institution as it thinks necessary in order to satisfy itself about the genuineness of the activities of the 69[research association], university, college or other institution and that 72[Government] may also make such inquiries as it may deem necessary in this behalf :
Provided also that any 73[notification issued, by the Central Government under clause (ii) or clause (iii), before the date on which the Taxation Laws (Amendment) Bill, 2006 receives 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 commencing before the date on which such notification is issued) as may be specified in the notification:]
74[Provided also that where an application under the first proviso is made on or after the date on which the Taxation Laws (Amendment) Bill, 2006 receives the assent of the President†, every notification under clause (ii) or clause (iii) shall be issued or an order rejecting the application shall be passed within the period of twelve months from the end of the month in which such application was received by the Central Government.]
(2) For the purposes of clause (iv) of sub-section (1),—
75[(i) in a case where such capital expenditure is incurred before the 1st day of April, 1967, one-fifth of the capital expenditure incurred in any previous year shall be deducted for that previous year; and the balance of the expenditure shall be deducted in equal instalments for each of the four immediately succeeding previous years ;
(ia) in a case where such capital expenditure is incurred after the 31st day of March, 1967, the whole of such capital expenditure incurred in any previous year76 shall be deducted for that previous year :]
77[Provided that no deduction shall be admissible under this clause in respect of any expenditure incurred on the acquisition of any land, whether the land is acquired as such or as part of any property, after the 29th day of February, 1984.]
78[Explanation 1].—Where any capital expenditure has been incurred before the commencement of the business, the aggregate of the expenditure so incurred within the three years immediately preceding the commencement of the business shall be deemed to have been incurred in the previous year in which the business is commenced.
77[Explanation 2.—For the purposes of this clause,—
(a) “land” includes any interest in land ; and
(b) the acquisition of any land shall be deemed to have been made by the assessee on the date on which the instrument of transfer of such land to him has been registered under the Registration Act, 1908 (16 of 1908), or where he has taken or retained the possession of such land or any part thereof in part performance of a contract of the nature referred to in section 53A79 of the Transfer of Property Act, 1882 (4 of 1882), the date on which he has so taken or retained possession of such land or part ;]
(ii) notwithstanding anything contained in clause (i), where an asset representing expenditure of a capital nature 80[incurred before the 1st day of April, 1967,] ceases to be used in a previous year for scientific research related to the business and the value of the asset at the time of the cessation, together with the aggregate of deductions already allowed under clause (i) falls short of the said expenditure, then—
(a) there shall be allowed a deduction for that previous year of an amount equal to such deficiency, and
(b) no deduction shall be allowed under that clause for that previous year or for any subsequent previous year ;
(iii) if the asset mentioned in clause (ii) is sold, without having been used for other purposes, in the year of cessation, the sale price shall be taken to be the value of the asset at the time of the cessation ; and if the asset is sold, without having been used for other purposes, in a previous year subsequent to the year of cessation, and the sale price falls short of the value of the asset taken into account at the time of cessation, an amount equal to the deficiency shall be allowed as a deduction for the previous year in which the sale took place ;
(iv) where a deduction is allowed for any previous year under this section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed under 81[clause (ii) of sub-section (1)] of section 32 for the same 82[or any other] previous year in respect of that asset ;
(v) where the asset 83[mentioned in clause (ii)] is used in the business after it ceases to be used for scientific research related to that business, depreciation shall be admissible under 84[clause (ii) of sub-section (1)] of section 32.
85[(2A) 86Where 87[, before the 1st day of March, 1984,] the assessee pays any sum 88[(being any sum paid with a specific direction that the sum shall not be used for the acquisition of any land or building or construction of any building)] to a scientific research association or university or college or other institution referred to in clause (ii) of sub-section (1) 89[or to a public sector company] to be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority90 having regard to the social, economic and industrial needs of India, then,—
(a) there shall be allowed a deduction of a sum equal to one and one-third times the sum so paid ; and
(b) no deduction in respect of such sum shall be allowed under clause (ii) of sub-section (1) for the same or any other assessment year.]
91[Explanation.—For the purposes of this sub-section, “public sector company” shall have the same meaning as in clause (b) of the Explanation below sub-section (2B) of section 32A.]
92[(2AA) 93Where the assessee pays any sum to a National Laboratory 94[or a 95[University or an Indian Institute of Technology or a specified person] with a specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority96, then—
(a) there shall be allowed a deduction of a sum equal to 97[two] times the sum so paid ; and
(b) no deduction in respect of such sum shall be allowed under any other provision of this Act :
98[Provided that the prescribed authority shall, before granting approval, satisfy itself about the feasibility of carrying out the scientific research and shall submit its report to the 98a[Principal Director General or] Director General in such form as may be prescribed.99]
1[Explanation 1.—The deduction, to which the assessee is entitled in respect of any sum paid to a National Laboratory, University, Indian Institute of Technology or a specified person for the approved programme referred to in this sub-section, shall not be denied merely on the ground that, subsequent to the payment of such sum by the assessee, the approval granted to,—
(a) such Laboratory, or specified person has been withdrawn; or
(b) the programme, undertaken by the National Laboratory, University, Indian Institute of Technology or specified person, has been withdrawn.]
2[Explanation 3[2].—For the purposes of this section,—
(a) “National Laboratory” means a scientific laboratory functioning at the national level under the aegis of the Indian Council of Agricultural Research, the Indian Council of Medical Research, the Council of Scientific and Industrial Research, the Defence Research and Development Organisation, the Department of Electronics, the Department of Bio-Technology or the Department of Atomic Energy and which is approved as a National Laboratory by the prescribed authority in such manner as may be prescribed ;
(b) “University” shall have the same meaning as in Explanation to clause (ix) of section 47 ;
(c) “Indian Institute of Technology” shall have the same meaning as that of “Institute” in clause (g) of section 34 of the Institutes of Technology Act, 1961 (59 of 1961)];
5[(d) “specified person” means such person as is approved by the pres-cribed authority.]
6[(2AB)(1) Where a company engaged in the business of 7[bio-technology or in 8[any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule]] incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility as approved by the prescribed authority9, then, there shall be allowed a deduction of 10[a sum equal to 11[two] times of the expenditure] so incurred.
12[Explanation.—For the purposes of this clause, “expenditure on scientific research”, in relation to drugs and pharmaceuticals, shall include expenditure incurred on clinical drug trial, obtaining approval from any regulatory authority under any Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970 (39 of 1970).]
(2) No deduction shall be allowed in respect of the expenditure mentioned in clause (1) under any other provision of this Act.
(3) No company shall be entitled for deduction under clause (1) unless it enters into an agreement with the prescribed authority for co-operation in such research and development facility and for audit of the accounts maintained for that facility.
(4) The prescribed authority shall submit its report in relation to the approval of the said facility to the 12a[Principal Director General or] Director General in such form and within such time as may be prescribed.]
13[(5) No deduction shall be allowed in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 14[2017].
15[(6) No deduction shall be allowed to a company approved under sub-clause (C) of clause (iia) of sub-section (1) in respect of the expenditure referred to in clause (1) which is incurred after the 31st day of March, 2008.]
16[(2B)(a) Where 17[, before the 1st day of March, 1984,] an assessee has incurred any expenditure (not being in the nature of capital expenditure incurred on the acquisition of any land or building or construction of any building) on scientific research undertaken under a programme approved in this behalf by the prescribed authority having regard to the social, economic and industrial needs of India, he shall, subject to the provisions of this sub-section, be allowed a deduction of a sum equal to one and one-fourth times the amount of the expenditure certified by the prescribed authority to have been so incurred during the previous year.
(b) Where a deduction has been allowed under clause (a) for any previous year in respect of any expenditure, no deduction in respect of such expenditure shall be allowed under clause (i) of sub-section (1) or clause (ia) of sub-section (2) for the same or any other previous year.
(c) Where a deduction is allowed for any previous year under this sub-section in respect of expenditure represented wholly or partly by an asset, no deduction shall be allowed in respect of that asset under 18[clause (ii) of sub-section (1)] of section 32 for the same or any subsequent previous year.
(d) Any deduction made under this sub-section in respect of any expenditure on scientific research in excess of the expenditure actually incurred shall be deemed to have been wrongly made for the purposes of this Act if the assessee fails to furnish within one year of the period allowed by the prescribed authority for completion of the programme, a certificate of its completion obtained from that authority, and the provisions of sub-section (5B) of section 155 shall apply accordingly.]
19[(3) If any question arises under this section as to whether, and if so, to what extent, any activity constitutes or constituted, or any asset is or was being used for, scientific research, the Board shall refer the question to—
(a) the Central Government, when such question relates to any activity under clauses (ii) and (iii) of sub-section (1), and its decision shall be final;
(b) the prescribed authority20, when such question relates to any activity other than the activity specified in clause (a), whose decision shall be final.]
(4) The provisions of sub-section (2) of section 32 shall apply in relation to deductions allowable under clause (iv) of sub-section (1) as they apply in relation to deductions allowable in respect of depreciation.
21[(5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company (being an Indian company) any asset representing expenditure of a capital nature on scientific research,—
(i) the amalgamating company shall not be allowed the deduction under clause (ii) or clause (iii) of sub-section (2); and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalga-mating company if the latter had not so sold or otherwise transferred the asset.]]
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Section 35A: 22[Expenditure on acquisition of patent rights or copyrights.
- (1) In respect of any expenditure of a capital nature incurred after the 28th day of February, 1966 23[but before the 1st day of April, 1998], on the acquisition of patent rights or copyrights (hereafter, in this section, referred to as rights) used for the purposes of the business, there shall, subject to and in accordance with the provisions of this section, be allowed for each of the relevant previous years, a deduction equal to the appropriate fraction of the amount of such expenditure.
- —For the purposes of this section,—
(i) “relevant previous years” means the fourteen previous years beginning with the previous year in which such expenditure is incurred or, where such expenditure is incurred before the commencement of the business, the fourteen previous years beginning with the previous year in which the business commenced :
Provided that where the rights commenced, that is to say, became effective, in any year prior to the previous year in which expenditure on the acquisition thereof was incurred by the assessee, this clause shall have effect with the substitution for the reference to fourteen years of a reference to fourteen years less the number of complete years which, when the rights are acquired by the assessee, have elapsed since the commencement thereof, and if fourteen years have elapsed as aforesaid, of a reference to one year;
(ii) “appropriate fraction” means the fraction the numerator of which is one and the denominator of which is the number of the relevant previous years.
(2) Where the rights come to an end without being subsequently revived or where the whole or any part of the rights is sold and the proceeds of the sale (so far as they consist of capital sums) are not less than the cost of acquisition thereof remaining unallowed, no deduction under sub-section (1) shall be allowed in respect of the previous year in which the rights come to an end or, as the case may be, the whole or any part of the rights is sold or in respect of any subsequent previous year.
(3) Where the rights either come to an end without being subsequently revived or are sold in their entirety and the proceeds of the sale (so far as they consist of capital sums) are less than the cost of acquisition thereof remaining unallowed, a deduction equal to such cost remaining unallowed or, as the case may be, such cost remaining unallowed as reduced by the proceeds of the sale, shall be allowed in respect of the previous year in which the rights come to an end, or, as the case may be, are sold.
(4) Where the whole or any part of the rights is sold and the proceeds of the sale (so far as they consist of capital sums) exceed the amount of the cost of acquisition thereof remaining unallowed, so much of the excess as does not exceed the difference between the cost of acquisition of the rights and the amount of such cost remaining unallowed shall be chargeable to income-tax as income of the business of the previous year in which the whole or any part of the rights is sold.
- —Where the whole or any part of the rights is sold in a previous year in which the business is no longer in existence, the provisions of this sub-section shall apply as if the business is in existence in that previous year.
(5) Where a part of the rights is sold and sub-section (4) does not apply, the amount of the deduction to be allowed under sub-section (1) shall be arrived at by—
(a) subtracting the proceeds of the sale (so far as they consist of capital sums) from the amount of the cost of acquisition of the rights remaining unallowed; and
(b) dividing the remainder by the number of relevant previous years which have not expired at the beginning of the previous year during which the rights are sold.]
24[(6) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers the rights to the amalgamated company (being an Indian company),—
(i) the provisions of sub-sections (3) and (4) shall not apply in the case of the amalgamating company; and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalga-mating company if the latter had not so sold or otherwise transferred the rights.]
25[(7) Where in a scheme of demerger, the demerged company sells or otherwise transfers the rights to the resulting company (being an Indian company),—
(i) the provisions of sub-sections (3) and (4) shall not apply in the case of the demerged company; and
(ii) the provisions of this section shall, as far as may be, apply to the resulting company as they would have applied to the demerged company, if the latter had not sold or otherwise transferred the rights.]
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Section 35AB: 26[Expenditure on know-how.
- (1) Subject to the provisions of sub-section (2), where the assessee has paid in any previous year 27[relevant to the assessment year commencing on or before the 1st day of April, 1998] any lump sum consideration for acquiring28 any know-how for use 28for the purposes of his business, one-sixth of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance amount shall be deducted in equal instalments for each of the five immediately succeeding previous years.
(2) Where the know-how referred to in sub-section (1) is developed in a laboratory, university or institution referred to in sub-section (2B) of section 32A, one-third of the said lump sum consideration paid in the previous year by the assessee shall be deducted in computing the profits and gains of the business for that year, and the balance amount shall be deducted in equal instalments for each of the two immediately succeeding previous years.
29[(3) Where there is a transfer of an undertaking under a scheme of amalgamation or demerger and the amalgamating or the demerged company is entitled to a deduction under this section, then, the amalgamated company or the resulting company, as the case may be, shall be entitled to claim deduction under this section in respect of such undertaking to the same extent and in respect of the residual period as it would have been allowable to the amalgamating company or the demerged company, as the case may be, had such amalgamation or demerger not taken place.]
Explanation.—For the purposes of this section, “know-how” means any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil well or other sources of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto).]
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Section 35ABB: 30[Expenditure for obtaining licence to operate telecommunication services.
- (1) In respect of any expenditure, being in the nature of capital expenditure, incurred for acquiring any right to operate telecommunication services 31[either before the commencement of the business to operate telecommunication services or thereafter at any time during any previous year] and for which payment has actually been made to obtain a licence, there shall, subject to and in accordance with the provisions of this section, be allowed for each of the relevant previous years, a deduction equal to the appropriate fraction of the amount of such expenditure.
Explanation.—For the purposes of this section,—
32[(i) “relevant previous years” means,—
(A) in a case where the licence fee is actually paid before the commencement of the business to operate telecommunication services, the previous years beginning with the previous year in which such business commenced;
(B) in any other case, the previous years beginning with the previous year in which the licence fee is actually paid,
and the subsequent previous year or years during which the licence, for which the fee is paid, shall be in force;]
(ii) “appropriate fraction” means the fraction the numerator of which is one and the denominator of which is the total number of the relevant previous years;
(iii) “payment has actually been made” means the actual payment of expenditure irrespective of the previous year in which the liability for the expenditure was incurred according to the method of accounting regularly employed by the assessee.
(2) Where the licence is transferred and the proceeds of the transfer (so far as they consist of capital sums) are less than the expenditure incurred remaining unallowed, a deduction equal to such expenditure remaining unallowed, as reduced by the proceeds of the transfer, shall be allowed in respect of the previous year in which the licence is transferred.
(3) Where the whole or any part of the licence is transferred and the proceeds of the transfer (so far as they consist of capital sums) exceed the amount of the expenditure incurred remaining unallowed, so much of the excess as does not exceed the difference between the expenditure incurred to obtain the licence and the amount of such expenditure remaining unallowed shall be chargeable to income-tax as profits and gains of the business in the previous year in which the licence has been transferred.
Explanation.—Where the licence is transferred in a previous year in which the business is no longer in existence, the provisions of this sub-section shall apply as if the business is in existence in that previous year.
(4) Where the whole or any part of the licence is transferred and the proceeds of the transfer (so far as they consist of capital sums) are not less than the amount of expenditure incurred remaining unallowed, no deduction for such expenditure shall be allowed under sub-section (1) in respect of the previous year in which the licence is transferred or in respect of any subsequent previous year or years.
(5) Where a part of the licence is transferred in a previous year and sub-section (3) does not apply, the deduction to be allowed under sub-section (1) for expenditure incurred remaining unallowed shall be arrived at by—
(a) subtracting the proceeds of transfer (so far as they consist of capital sums) from the expenditure remaining unallowed; and
(b) dividing the remainder by the number of relevant previous years which have not expired at the beginning of the previous year during which the licence is transferred.
(6) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers the licence to the amalgamated company (being an Indian company),—
(i) the provisions of sub-sections (2), (3) and (4) shall not apply in the case of the amalgamating company; and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalga-mating company if the latter had not transferred the licence.]
33[(7) Where, in a scheme of demerger, the demerged company sells or otherwise transfers the licence to the resulting company (being an Indian company),—
(i) the provisions of sub-sections (2), (3) and (4) shall not apply in the case of the demerged company; and
(ii) the provisions of this section shall, as far as may be, apply to the resulting company as they would have applied to the demerged company if the latter had not transferred the licence.]
34[(8) Where a deduction for any previous year under sub-section (1) is claimed and allowed in respect of any expenditure referred to in that sub-section, no deduction shall be allowed under sub-section (1) of section 32 for the same previous year or any subsequent previous year.]
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Section 35AC: 35[Expenditure on eligible projects or schemes.36
- (1) Where an assessee incurs any expenditure by way of payment of any sum to a public sector company or a local authority or to an association or institution approved37 by the National Committee38 for carrying out any eligible project or scheme, the assessee shall, subject to the provisions of this section, be allowed a deduction of the amount of such expenditure incurred during the previous year :
Provided that a company may, for claiming the deduction under this sub-section, incur expenditure either by way of payment of any sum as aforesaid or directly on the eligible project or scheme.
(2) The deduction under sub-section (1) shall not be allowed unless the assessee furnishes along with his return of income a certificate—
39(a) where the payment is to a public sector company or a local authority or an association or institution referred to in sub-section (1), from such public sector company or local authority or, as the case may be, association or institution;
40(b) in any other case, from an accountant, as defined in the Explanation below sub-section (2) of section 288,
in such form, manner and containing such particulars (including particulars relating to the progress in the work relating to the eligible project or scheme during the previous year) as may be prescribed.
41[Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to a public sector company or a local authority or to an association or institution for carrying out the eligible project or scheme referred to in this section applies, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee,—
(a) the approval granted to such association or institution has been withdrawn; or
(b) the notification notifying the eligible project or scheme carried out by the public sector company or local authority or association or institution has been withdrawn.]
(3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.
42[(4) Where an association or institution is approved by the National Committee under sub-section (1), and subsequently—
(i) that Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which approval was granted; or
(ii) such association or institution, to which approval has been granted, has not furnished to the National Committee, after the end of each financial year, a report in such form and setting forth such particulars and within such time as may be prescribed43,
the National Committee may, at any time, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned association or institution, withdraw the approval:
Provided that a copy of the order withdrawing the approval shall be forwarded by the National Committee to the Assessing Officer having jurisdiction over the concerned association or institution.
(5) Where any project or scheme has been notified as an eligible project or scheme under clause (b) of the Explanation, and subsequently—
(i) the National Committee is satisfied that the project or the scheme is not being carried on in accordance with all or any of the conditions subject to which such project or scheme was notified; or
(ii) a report in respect of such eligible project or scheme has not been furnished after the end of each financial year, in such form and setting forth such particulars and within such time as may be prescribed44,
such notification may be withdrawn in the same manner in which it was issued:
Provided that a reasonable opportunity of showing cause against the proposed withdrawal shall be given by the National Committee to the concerned association, institution, public sector company or local authority, as the case may be:
Provided further that a copy of the notification by which the notification of the eligible project or scheme is withdrawn shall be forwarded to the Assessing Officer having jurisdiction over the concerned association, institution, public sector company or local authority, as the case may be, carrying on such eligible project or scheme.]
45[(6) Notwithstanding anything contained in any other provision of this Act, where—
(i) the approval of the National Committee, granted to an association or institution, is withdrawn under sub-section (4) or the notification in respect of eligible project or scheme is withdrawn in the case of a public sector company or local authority or an association or institution under sub-section (5); or
(ii) a company has claimed deduction under the proviso to sub-section (1) in respect of any expenditure incurred directly on the eligible project or scheme and the approval for such project or scheme is withdrawn by the National Committee under sub-section (5),
the total amount of the payment received by the public sector company or the local authority or the association or the institution, as the case may be, in respect of which such company or authority or association or institution has furnished a certificate referred to in clause (a) of sub-section (2) or the deduction claimed by a company under the proviso to sub-section (1) shall be deemed to be the income of such company or authority or association or institution, as the case may be, for the previous year in which such approval or notification is withdrawn and tax shall be charged on such income at the maximum marginal rate in force for that year.]
- —For the purposes of this section,—
(a) “National Committee” means the Committee constituted by the Central Government, from amongst persons of eminence in public life, in accordance with the rules made under this Act;
(b) “eligible project or scheme” means such project or scheme for promoting the social and economic welfare of, or the uplift of, the public as the Central Government may, by notification in the Official Gazette, specify46 in this behalf on the recommendations of the National Committee.]
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Section 35AD: 47[Deduction in respect of expenditure on specified business.
- (1) An assessee shall be allowed a deduction in respect of the whole of any expenditure of capital nature incurred, wholly and exclusively, for the purposes of any specified business carried on by him during the previous year in which such expenditure is incurred by him :
Provided that the expenditure incurred, wholly and exclusively, for the purposes of any specified business, shall be allowed as deduction during the previous year in which he commences operations of his specified business, if—
(a) the expenditure is incurred prior to the commencement of its operations; and
(b) the amount is capitalised in the books of account of the assessee on the date of commencement of its operations.
48[(1A) Where the specified business is of the nature referred to in sub-clause (i) or sub-clause (ii) or sub-clause (v) or sub-clause (vii) or sub-clause (viii) of clause (c) of sub-section (8) and has commenced its operations on or after the 1st day of April, 2012, the deduction under sub-section (1) shall be allowed of an amount equal to one and one-half times of the expenditure referred to therein.]
(2) This section applies to the specified business which fulfils all the following conditions, namely :—
(i) it is not set up by splitting up, or the reconstruction, of a business already in existence;
(ii) it is not set up by the transfer to the specified business of machinery or plant previously used for any purpose;
(iii) where the business is of the nature referred to in sub-clause (iii) of clause (c) of sub-section (8), such business,—
(a) is owned by a company formed and registered in India under the Companies Act, 1956 (1 of 1956)48a or by a consortium of such companies or by an authority or a board or a corporation established or constituted under any Central or State Act;
(b) has been approved by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) and notified by the Central Government in the Official Gazette in this behalf;
(c) has made not less than 49[such proportion of its total pipeline capacity as specified by regulations made by the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006)] available for use on common carrier basis by any person other than the assessee or an associated person; and
(d) fulfils any other condition as may be prescribed.
50[(3) Where a deduction under this section is claimed and allowed in respect of the specified business for any assessment year, no deduction shall be allowed under the provisions of 50a[section 10AA and] Chapter VI-A under the heading “C.—Deductions in respect of certain incomes” in relation to such specified business for the same or any other assessment year.]
(4) No deduction in respect of the expenditure referred to in sub-section (1) shall be allowed to the assessee under any other section in any previous year or under this section in any other previous year.
(5) The provisions of this section shall apply to the specified business referred to in sub-section (2) if it commences its operations,—
(a) on or after the 1st day of April, 2007, where the specified business is in the nature of laying and operating a cross-country natural gas pipeline network for distribution, including storage facilities being an integral part of such network; 51[***]
52[(aa) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hotel of two-star or above category as classified by the Central Government;
(ab) on or after the 1st day of April, 2010, where the specified business is in the nature of building and operating a new hospital with at least one hundred beds for patients;
(ac) on or after the 1st day of April, 2010, where the specified business is in the nature of developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and which is notified by the Board in this behalf in accordance with the guidelines as may be prescribed; 53[***]]
54[(ad) on or after the 1st day of April, 2011, where the specified business is in the nature of developing and building a housing project under a scheme for affordable housing framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed;
(ae) on or after the 1st day of April, 2011, in a new plant or in a newly installed capacity in an existing plant for production of fertilizer; 55[***]]
56[(af) on or after the 1st day of April, 2012, where the specified business is in the nature of setting up and operating an inland container depot or a container freight station notified or approved under the Customs Act, 1962 (52 of 1962);
(ag) on or after the 1st day of April, 2012, where the specified business is in the nature of bee-keeping and production of honey and beeswax;
(ah) on or after the 1st day of April, 2012, where the specified business is in the nature of setting up and operating a warehousing facility for storage of sugar; 56a[and]]
The following clauses (ai) and (aj) shall be inserted after clause (ah) of sub-section (5) of section 35AD by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(ai) on or after the 1st day of April, 2014, where the specified business is in the nature of laying and operating a slurry pipeline for the transportation of iron ore;
(aj) on or after the 1st day of April, 2014, where the specified business is in the nature of setting up and operating a semi-conductor wafer fabrication manufacturing unit, and which is notified by the Board in accordance with such guidelines as may be prescribed; and
(b) on or after the 1st day of April, 2009, in all other cases not falling under 57[any of the above clauses].
(6) The assessee carrying on the business of the nature referred to in clause (a) of sub-section (5) shall be allowed, in addition to deduction under sub-section (1), a further deduction in the previous year relevant to the assessment year beginning on the 1st day of April, 2010, of an amount in respect of expenditure of capital nature incurred during any earlier previous year, if—
(a) the business referred to in clause (a) of sub-section (5) has commenced its operation at any time during the period beginning on or after the 1st day of April, 2007 and ending on the 31st day of March, 2009; and
(b) no deduction for such amount has been allowed or is allowable to the assessee in any earlier previous year.
58[(6A) Where the assessee builds a hotel of two-star or above category as classified by the Central Government and subsequently, while continuing to own the hotel, transfers the operation thereof to another person, the assessee shall be deemed to be carrying on the specified business referred to in sub-clause (iv) of clause (c) of sub-section (8).]
(7) The provisions contained in sub-section (6) of section 80A and the provisions of sub-sections (7) and (10) of section 80-IA shall, so far as may be, apply to this section in respect of goods or services or assets held for the purposes of the specified business.
The following sub-sections (7A), (7B) and (7C) shall be inserted after sub-section (7) of section 35AD by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(7A) Any asset in respect of which a deduction is claimed and allowed under this section shall be used only for the specified business, for a period of eight years beginning with the previous year in which such asset is acquired or constructed.
(7B) Where any asset, in respect of which a deduction is claimed and allowed under this section, is used for a purpose other than the specified business during the period specified in sub-section (7A), otherwise than by way of a mode referred to in clause (vii) of section 28, the total amount of deduction so claimed and allowed in one or more previous years, as reduced by the amount of depreciation allowable in accordance with the provisions of section 32, as if no deduction under this section was allowed, shall be deemed to be the income of the assessee chargeable under the head “Profits and gains of business or profession” of the previous year in which the asset is so used.
(7C) Nothing contained in sub-section (7B) shall apply to a company which has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986)58a, during the period specified in sub-section (7A).
(8) For the purposes of this section,—
(a) an “associated person”, in relation to the assessee, means a person,—
(i) who participates, directly or indirectly, or through one or more intermediaries in the management or control or capital of the assessee;
(ii) who holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the capital of the assessee;
(iii) who appoints more than half of the Board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of the assessee; or
(iv) who guarantees not less than ten per cent of the total borrowings of the assessee;
(b) “cold chain facility” means a chain of facilities for storage or transportation of agricultural and forest produce, meat and meat products, poultry, marine and dairy products, products of horticulture, floriculture and apiculture and processed food items under scientifically controlled conditions including refrigeration and other facilities necessary for the preservation of such produce;
(c) “specified business” means any one or more of the following business, namely :—
(i) setting up and operating a cold chain facility;
(ii) setting up and operating a warehousing facility for storage of agricultural produce;
(iii) laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network;
59[(iv) building and operating, anywhere in India, a 60[hotel] of two-star or above category as classified by the Central Government;
(v) building and operating, anywhere in India, a 61[hospital] with at least one hundred beds for patients;
(vi) developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed;]
62[(vii) developing and building a housing project under a scheme for affordable housing framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed63;
(viii) production of fertilizer in India;]
64[(ix) setting up and operating an inland container depot or a container freight station notified or approved under the Customs Act, 1962 (52 of 1962);
(x) bee-keeping and production of honey and beeswax;
(xi) setting up and operating a warehousing facility for storage of sugar;]
The following sub-clauses (xii) and (xiii) shall be inserted after sub-clause (xi) of clause (c) of sub-section (8) of section 35AD by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(xii) laying and operating a slurry pipeline for the transportation of iron ore;
(xiii) setting up and operating a semi-conductor wafer fabrication manufacturing unit notified by the Board in accordance with such guidelines as may be prescribed;
(d) any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if—
(i) such machinery or plant was not, at any time prior to the date of the installation by the assessee, used in India;
(ii) such machinery or plant is imported into India from any country outside India; and
(iii) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under the provisions of this Act in computing the total income of any person for any period prior to the date of installation of the machinery or plant by the assessee;
(e) where in the case of a specified business, any machinery or plant or any part thereof previously used for any purpose is transferred to the specified business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in such business, then, for the purposes of clause (ii) of sub-section (2), the condition specified therein shall be deemed to have been complied with;
(f) any expenditure of capital nature shall not include any expenditure incurred on the acquisition of any land or goodwill or financial instrument.]
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Section 35B: Export markets development allowance.
- 65[Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35B was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]
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Section 35C: Agricultural development allowance.
- 66[Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35C was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]
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Section 35CC: Rural development allowance.
- 67[Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35CC was inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-9-1977.]
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Section 35CCA: 68[Expenditure by way of payment to associations and institutions for carrying out rural development programmes.
6935CCA. 70[(1) Where an assessee incurs any expenditure by way of payment of any sum—
(a) to an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved by the prescribed authority71; or
(b) to an association or institution, which has as its object the training of persons for implementing programmes of rural development; 72[or]
72[(c) to a rural development fund set up and notified73 by the Central Government in this 74[behalf; or]
75[(d) to the National Urban Poverty Eradication Fund set up and notified by the Central Government in this behalf,]
the assessee shall, subject to the provisions of sub-section (2), be allowed a deduction of the amount of such expenditure incurred during the previous year.]
76[(2) The deduction under clause (a) of sub-section (1) shall not be allowed in respect of expenditure by way of payment of any sum to any association or institution referred to in the said clause unless the assessee furnishes a certificate from such association or institution to the effect that—
(a) the programme of rural development had been approved by the prescribed authority before the 1st day of March, 1983; and
(b) where such payment is made after the 28th day of February, 1983, such programme involves work by way of construction of any building or other structure (whether for use as a dispensary, school, training or welfare centre, workshop or for any other purpose) or the laying of any road or the construction or boring of a well or tube-well or the installation of any plant or machinery, and such work has commenced before the 1st day of March, 1983.]
77[(2A) The deduction under clause (b) of sub-section (1) shall not be allowed in respect of expenditure by way of payment of any sum to any association or institution unless the assessee furnishes a certificate from such association or institution to the effect that—
(a) the prescribed authority had approved the association or institution before the 1st day of March, 1983; and
(b) the training of persons for implementing any programme of rural development had been started by the association or institution before the 1st day of March, 1983.]
78[Explanation.—The deduction, to which the assessee is entitled in respect of any sum paid to an association or institution for carrying out the programme of rural development referred to in sub-section (1), shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee, the approval granted to such programme of rural development, or as the case may be, to the association or institution has been withdrawn.]
79[(2B) No certificate of the nature referred to in sub-section (2) or sub-section (2A) shall be issued by any association or institution unless such association or institution has obtained from the prescribed authority authorisation in writing to issue certificates of such nature.]
- —For the purposes of this section, “programme of rural development” shall have the meaning assigned to it in the Explanation to sub-section (1) of section 35CC80.
(3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under section 35C80 or section 35CC80 or section 80G or any other provision of this Act for the same or any other assessment year.]
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Section 35CCB: 81[Expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources.
- 82[(1) Where an assessee incurs any expenditure 83[on or before the 31st day of March, 2002] by way of payment of any sum—
(a) to an association or institution, which has as its object the undertaking of any programme of conservation of natural resources or of affore-station, to be used for carrying out any programme of conservation of natural resources or afforestation approved84 by the prescribed authority85; or
(b) to such fund for afforestation as may be notified by the Central Government,
the assessee shall, subject to the provisions of sub-section (2), be allowed a deduction of the amount of such expenditure incurred during the previous year.]
(2) The deduction under 86[clause (a) of] sub-section (1) shall not be allowed with respect to expenditure by way of payment of any sum to any association or institution, unless such association or institution is for the time being approved in this behalf by the prescribed authority87 :
Provided that the prescribed authority shall not grant such approval for more than three years at a time.
(3) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.]
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Section 35CCC: 88[Expenditure on agricultural extension project.
- (1) Where an assessee incurs any expenditure on agricultural extension project notified by the Board in this behalf in accordance with the guidelines as may be prescribed88a, then, there shall be allowed a deduction of a sum equal to one and one-half times of such expenditure.
(2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provisions of this Act for the same or any other assessment year.]
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Section 35CCD: 89[Expenditure on skill development project.
- (1) Where a company incurs any expenditure (not being expenditure in the nature of cost of any land or building) on any skill development project notified by the Board in this behalf in accordance with the guidelines as may be prescribed89a, then, there shall be allowed a deduction of a sum equal to one and one-half times of such expenditure.
(2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provisions of this Act for the same or any other assessment year.]
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Section 35D: 90[Amortisation of certain preliminary expenses.
9135D. (1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2),—
(i) before the commencement of his business, or
(ii) after the commencement of his business, in connection with the extension of his 92[***] undertaking or in connection with his setting up a new 92[***] unit,
the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the 92[***] undertaking is completed or the new 92[***] unit commences production or operation :
93[Provided that where an assessee incurs after the 31st day of March, 1998, any expenditure specified in sub-section (2), the provisions of this sub-section shall have effect as if for the words “an amount equal to one-tenth of such expenditure for each of the ten successive previous years”, the words “an amount equal to one-fifth of such expenditure for each of the five successive previous years” had been substituted.]
(2) The expenditure referred to in sub-section (1) shall be the expenditure specified in any one or more of the following clauses, namely :—
(a) expenditure in connection with—
(i) preparation of feasibility report;
(ii) preparation of project report;
(iii) conducting market survey or any other survey necessary for the business of the assessee;
(iv) engineering services relating to the business of the assessee :
Provided that the work in connection with the preparation of the feasibility report or the project report or the conducting of market survey or of any other survey or the engineering services referred to in this clause is carried out by the assessee himself or by a concern which is for the time being approved94 in this behalf by the Board;
(b) legal charges for drafting any agreement between the assessee and any other person for any purpose relating to the setting up or conduct of the business of the assessee;
(c) where the assessee is a company, also expenditure—
(i) by way of legal charges for drafting the Memorandum and Articles of Association of the company;
(ii) on printing of the Memorandum and Articles of Association;
(iii) by way of fees for registering the company under the provisions of the Companies Act, 1956 (1 of 1956)94a;
(iv) in connection with the issue, for public subscription, of shares in or debentures of the company, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus;
(d) such other items of expenditure (not being expenditure eligible for any allowance or deduction under any other provision of this Act) as may be prescribed.
(3) Where the aggregate amount of the expenditure referred to in sub-section (2) exceeds an amount calculated at two and one-half per cent—
(a) of the cost of the project, or
(b) where the assessee is an Indian company, at the option of the company, of the capital employed in the business of the company,
the excess shall be ignored for the purpose of computing the deduction allowable under sub-section (1) :
95[Provided that where the aggregate amount of expenditure referred to in sub-section (2) is incurred after the 31st day of March, 1998, the provisions of this sub-section shall have effect as if for the words “two and one-half per cent”, the words “five per cent” had been substituted.]
- —In this sub-section—
(a) “cost of the project” means—
(i) in a case referred to in clause (i) of sub-section (1), the actual cost of the fixed assets, being land, buildings, leaseholds, plant, machinery, furniture, fittings and railway sidings (including expenditure on development of land and buildings), which are shown in the books of the assessee as on the last day of the previous year in which the business of the assessee commences;
(ii) in a case referred to in clause (ii) of sub-section (1), the actual cost of the fixed assets, being land, buildings, leaseholds, plant, machinery, furniture, fittings and railway sidings (including expenditure on development of land and buildings), which are shown in the books of the assessee as on the last day of the previous year in which the extension of the 96[***] undertaking is completed or, as the case may be, the new 96[***] unit commences production or operation, in so far as such fixed assets have been acquired or developed in connection with the extension of the 96[***] undertaking or the setting up of the new 96[***] unit of the assessee;
(b) “capital employed in the business of the company” means—
(i) in a case referred to in clause (i) of sub-section (1), the aggregate of the issued share capital, debentures and long-term borrowings as on the last day of the previous year in which the business of the company commences;
(ii) in a case referred to in clause (ii) of sub-section (1), the aggregate of the issued share capital, debentures and long-term borrowings as on the last day of the previous year in which the extension of the 97[***] undertaking is completed or, as the case may be, the new 97[***] unit commences production or operation, in so far as such capital, debentures and long-term borrowings have been issued or obtained in connection with the extension of the 97[***] undertaking or the setting up of the new 97[***] unit of the company;
(c) “long-term borrowings” means—
(i) any moneys borrowed by the company from Government or the Industrial Finance Corporation of India or the Industrial Credit and Investment Corporation of India or any other financial institution 98[which is eligible for deduction under clause (viii) of sub-section (1) of section 36] or any banking institution (not being a financial institution referred to above), or
(ii) any moneys borrowed or debt incurred by it in a foreign country in respect of the purchase outside India of capital plant and machinery, where the terms under which such moneys are borrowed or the debt is incurred provide for the repayment thereof during a period of not less than seven years.
(4) Where the assessee is a person other than a company or a co-operative society, no deduction shall be admissible under sub-section (1) unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit in the prescribed form99 duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
(5) Where the undertaking of an Indian company which is entitled to the deduction under sub-section (1) is transferred, before the expiry of the period of ten years specified in sub-section (1), to another Indian company in a scheme of amalgamation,—
(i) no deduction shall be admissible under sub-section (1) in the case of the amalgamating company for the previous year in which the amalgamation takes place; and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalga-mating company if the amalgamation had not taken place.
1[(5A) Where the undertaking of an Indian company which is entitled to the deduction under sub-section (1) is transferred, before the expiry of the period specified in sub-section (1), to another company in a scheme of demerger,—
(i) no deduction shall be admissible under sub-section (1) in the case of the demerged company for the previous year in which the demerger takes place; and
(ii) the provisions of this section shall, as far as may be, apply to the resulting company, as they would have applied to the demerged company, if the demerger had not taken place.]
(6) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure specified in sub-section (2), the expenditure in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.]
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Section 35DD: 1[Amortisation of expenditure in case of amalgamation or demerger.
- (1) Where an assessee, being an Indian company, incurs any expenditure, on or after the 1st day of April, 1999, wholly and exclusively for the purposes of amalgamation or demerger of an undertaking, the assessee shall be allowed a deduction of an amount equal to one-fifth of such expenditure for each of the five successive previous years beginning with the previous year in which the amalgamation or demerger takes place.
(2) No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1) under any other provision of this Act.]
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Section 35DDA: 2[Amortisation of expenditure incurred under voluntary retirement scheme.
- (1) Where an assessee incurs any expenditure in any previous year by way of payment of any sum to an employee 3[in connection with] his voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, one-fifth of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance shall be deducted in equal instalments for each of the four immediately succeeding previous years.
4[(2) Where the assessee, being an Indian company, is entitled to the deduction under sub-section (1) and the undertaking of such Indian company entitled to the deduction under sub-section (1) is transferred, before the expiry of the period specified in that sub-section, to another Indian company in a scheme of amalgamation, the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalgamating company if the amalgamation had not taken place.
(3) Where the undertaking of an Indian company entitled to the deduction under sub-section (1) is transferred, before the expiry of the period specified in that sub-section, to another company in a scheme of demerger, the provisions of this section shall, as far as may be, apply to the resulting company, as they would have applied to the demerged company, if the demerger had not taken place.
(4) Where there has been reorganisation of business, whereby a firm is succeeded by a company fulfilling the conditions laid down in clause (xiii) of section 47 or a proprietary concern is succeeded by a company fulfilling the conditions laid down in clause (xiv) of section 47, the provisions of this section shall, as far as may be, apply to the successor company, as they would have applied to the firm or the proprietary concern, if reorganisation of business had not taken place.
5[(4A) Where there has been reorganisation of business, whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, the provisions of this section shall, as far as may be, apply to the successor limited liability partnership, as they would have applied to the said company, if reorganisation of business had not taken place.]
(5) No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1) in the case of the amalgamating company referred to in sub-section (2), in the case of demerged company referred to in 6[sub-section (3), in the case of a firm or proprietary concern referred to in sub-section (4) and in the case of a company referred to in sub-section (4A)] of this section, for the previous year in which amalgamation, demerger or succession, as the case may be, takes place.
(6) No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1) under any other provision of this Act.]]
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Section 35E: 7[Deduction for expenditure on prospecting, etc., for certain minerals.
- (1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, is engaged in any operations relating to prospecting for, or extraction or production of, any mineral and incurs, after the 31st day of March, 1970, any expenditure specified in sub-section (2), the assessee shall, in accordance with and subject to the provisions of this section, be allowed for each one of the relevant previous years a deduction of an amount equal to one-tenth of the amount of such expenditure.
(2) The expenditure referred to in sub-section (1) is that incurred by the assessee after the date specified in that sub-section at any time during the year of commercial production and any one or more of the four years immediately preceding that year, wholly and exclusively on any operations relating to prospecting for any mineral or group of associated minerals specified in Part A or Part B, respectively, of the Seventh Schedule or on the development of a mine or other natural deposit of any such mineral or group of associated minerals :
Provided that there shall be excluded from such expenditure any portion thereof which is met directly or indirectly by any other person or authority and any sale, salvage, compensation or insurance moneys realised by the assessee in respect of any property or rights brought into existence as a result of the expenditure.
(3) Any expenditure—
(i) on the acquisition of the site of the source of any mineral or group of associated minerals referred to in sub-section (2) or of any rights in or over such site;
(ii) on the acquisition of the deposits of such mineral or group of associated minerals or of any rights in or over such deposits; or
(iii) of a capital nature in respect of any building, machinery, plant or furniture for which allowance by way of depreciation is admissible under section 32,
shall not be deemed to be expenditure incurred by the assessee for any of the purposes specified in sub-section (2).
(4) The deduction to be allowed under sub-section (1) for any relevant previous year shall be—
(a) an amount equal to one-tenth of the expenditure specified in sub-section (2) (such one-tenth being hereafter in this sub-section referred to as the instalment); or
(b) such amount as is sufficient to reduce to nil the income (as computed before making the deduction under this section) of that previous year arising from the commercial exploitation [whether or not such commercial exploitation is as a result of the operations or development referred to in sub-section (2)] of any mine or other natural deposit of the mineral or any one or more of the minerals in a group of associated minerals as aforesaid in respect of which the expenditure was incurred,
whichever amount is less :
Provided that the amount of the instalment relating to any relevant previous year, to the extent to which it remains unallowed, shall be carried forward and added to the instalment relating to the previous year next following and deemed to be part of that instalment, and so on, for succeeding previous years, so, however, that no part of any instalment shall be carried forward beyond the tenth previous year as reckoned from the year of commercial production.
(5) For the purposes of this section,—
(a) “operation relating to prospecting” means any operation undertaken for the purposes of exploring, locating or proving deposits of any mineral, and includes any such operation which proves to be infructuous or abortive;
(b) “year of commercial production” means the previous year in which as a result of any operation relating to prospecting, commercial production of any mineral or any one or more of the minerals in a group of associated minerals specified in Part A or Part B, respectively, of the Seventh Schedule, commences;
(c) “relevant previous years” means the ten previous years beginning with the year of commercial production.
(6) Where the assessee is a person other than a company or a co-operative society, no deduction shall be admissible under sub-section (1) unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit in the prescribed form8 duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
(7) Where the undertaking of an Indian company which is entitled to the deduction under sub-section (1) is transferred, before the expiry of the period of ten years specified in sub-section (1), to another Indian company in a scheme of amalgamation—
(i) no deduction shall be admissible under sub-section (1) in the case of the amalgamating company for the previous year in which the amalgamation takes place; and
(ii) the provisions of this section shall, as far as may be, apply to the amalgamated company as they would have applied to the amalga-mating company if the amalgamation had not taken place.
9[(7A) Where the undertaking of an Indian company which is entitled to the deduction under sub-section (1) is transferred, before the expiry of the period of ten years specified in sub-section (1), to another Indian company in a scheme of demerger,—
(i) no deduction shall be admissible under sub-section (1) in the case of the demerged company for the previous year in which the demerger takes place; and
(ii) the provisions of this section shall, as far as may be, apply to the resulting company as they would have applied to the demerged company, if the demerger had not taken place.]
(8) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure specified in sub-section (2), the expenditure in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.]
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Section 36: Other deductions.
- 10 (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28—
11(i) the amount of any premium paid in respect of insurance against risk of damage12 or destruction12 of stocks or stores12 used for the purposes of the business or profession;
13[(ia) the amount of any premium paid by a federal milk co-operative society to effect or to keep in force an insurance on the life of the cattle owned by a member of a co-operative society, being a primary society engaged in supplying milk raised by its members to such federal milk co-operative society;]
14[(ib) the amount of any premium 15[paid by any mode of payment other than cash] by the assessee as an employer to effect or to keep in force an insurance on the health of his employees under a scheme framed in this behalf by—
(A) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government; or
(B) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);]
16(ii) any sum paid to an employee as bonus or commission17 for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission;
18[* * *]
19[* * *]
(iia) 20[Omitted by the Finance Act, 1999, w.e.f. 1-4-2000.]
21(iii) the amount of the interest22 paid in respect of capital22 borrowed22 for the purposes of the business22 or profession :
23[Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalised in the books of account or not); for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction.]
- —Recurring subscriptions paid periodically by shareholders, or subscribers in Mutual Benefit Societies which fulfil such conditions as may be prescribed, shall be deemed to be capital borrowed within the meaning of this clause;
24[(iiia) the pro rata amount of discount on a zero coupon bond having regard to the period of life of such bond calculated in the manner as may be prescribed25.
Explanation.—For the purposes of this clause, the expressions—
(i) “discount” means the difference between the amount received or receivable by the infrastructure capital company or infrastructure capital fund or public sector company 26[or scheduled bank] issuing the bond and the amount payable by such company or fund or public sector company 26[or scheduled bank] on maturity or redemption of such bond;
(ii) “period of life of the bond” means the period commencing from the date of issue of the bond and ending on the date of the maturity or redemption of such bond;
(iii) 27[***]]
28(iv) 29any sum paid30 by the assessee as an employer by way of contribution towards a recognised provident fund or an approved superannuation fund, subject to such limits as may be prescribed for the purpose of recognising the provident fund or approving the super-annuation fund, as the case may be; and subject to such 31conditions as the Board may think fit to specify in cases where the contributions are not in the nature of annual contributions of fixed amounts or annual contributions fixed on some definite basis by reference to the income chargeable under the head “Salaries” or to the contributions or to the number of members of the fund;
32[(iva) any sum paid by the assessee as an employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed ten per cent of the salary of the employee in the previous year.
Explanation.—For the purposes of this clause, “salary” includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites;]
33(v) 34any sum paid35 by the assessee as an employer by way of contribution towards an approved gratuity fund created by him for the exclusive benefit of his employees under an irrevocable trust;
36[(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee’s account in the relevant fund or funds on or before the due date.
- —For the purposes of this clause, “due date” means the date by which the assessee is required as an employer to credit an employee’s contribution to the employee’s account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise;]
37(vi) in respect of animals which have been used for the purposes of the business or profession otherwise than as stock-in-trade and have died or become permanently useless for such purposes, the difference between the actual cost to the assessee of the animals and the amount, if any, realised in respect of the carcasses or animals;
37(vii) subject to the provisions of sub-section (2), the amount of 38[any 39bad debt or part thereof39 which is written off as irrecoverable in the accounts of the assessee for the previous year]:
40[Provided that in the case of 41[an assessee] to which clause (viia) applies, the amount of the deduction relating to any such debt or part thereof shall be limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account made under that clause.]
42[43[Explanation 1].—For the purposes of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful debts made in the accounts of the assessee;]
44[Explanation 2.—For the removal of doubts, it is hereby clarified that for the purposes of the proviso to clause (vii) of this sub-section and clause (v) of sub-section (2), the account referred to therein shall be only one account in respect of provision for bad and doubtful debts under clause (viia) and such account shall relate to all types of advances, including advances made by rural branches;]
45[(viia) 46[47 in respect of any provision for bad and doubtful debts made by—
(a) a scheduled bank [not being 48[* * *] a bank incorporated by or under the laws of a country outside India] or a non-scheduled bank 49[or a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank], an amount 50[not exceeding seven and one-half per cent] of the total income (computed before making any deduction under this clause and Chapter VIA) and an amount not exceeding 51[ten] per cent of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner :
52[Provided that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed in any of the relevant assessment years, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five per cent of the amount of such assets shown in the books of account of the bank on the last day of the previous year:]
53[Provided further that for the relevant assessment years com-mencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the provisions of the first proviso shall have effect as if for the words “five per cent”, the words “ten per cent” had been substituted :]
54[Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exceeding the income derived from redemption of securities in accordance with a scheme framed by the Central Government:
Provided also that no deduction shall be allowed under the third proviso unless such income has been disclosed in the return of income under the head “Profits and gains of business or profession.” ]
55[Explanation.—For the purposes of this sub-clause, “relevant assessment years” means the five consecutive assessment years commencing on or after the 1st day of April, 2000 and ending before the 1st day of April, 2005;]
(b) a bank, being a bank incorporated by or under the laws of a country outside India, an amount not exceeding five per cent of the total income (computed before making any deduction under this clause and Chapter VI-A);]
56[(c) a public financial institution or a State financial corporation or a State industrial investment corporation, an amount not exceeding five per cent of the total income (computed before making any deduction under this clause and Chapter VI-A) :]
57[Provided that a public financial institution or a State financial corporation or a State industrial investment corporation referred to in this sub-clause shall, at its option, be allowed in any of the two consecutive assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, of an amount not exceeding ten per cent of the amount of such assets shown in the books of account of such institution or corporation, as the case may be, on the last day of the previous year.]
- —For the purposes of this clause,—
58[(i) “non-scheduled bank” means a 59banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank;]
60[(ia)] “rural branch” means a branch of a scheduled bank 61[or a non-scheduled bank] situated in a place62 which has a population of not more than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year;
63[(ii) “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary 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 bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934) 64[***];]
65[(iii) “public financial institution” shall have the meaning assigned to it in section 4A66 of the Companies Act, 1956 (1 of 1956);
(iv) “State financial corporation” means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951);
(v) “State industrial investment corporation” means a Government company67 within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects and 68[eligible for deduction under clause (viii) of this sub-section];]
69[(vi) “co-operative bank”, “primary agricultural credit society” and “primary co-operative agricultural and rural development bank” shall have the meanings respectively assigned to them in the Explanation to sub-section (4) of section 80P;]
70[(viii) in respect of any special reserve created and maintained by a specified entity, an amount not exceeding twenty per cent of the profits derived from eligible business computed under the head “Profits and gains of business or profession” (before making any deduction under this clause) carried to such reserve account:
Provided that where the aggregate of the amounts carried to such reserve account from time to time exceeds twice the amount of the paid up share capital and of the general reserves of the specified entity, no allowance under this clause shall be made in respect of such excess.
Explanation.—In this clause,—
(a) “specified entity” means,—
(i) a financial corporation specified in section 4A of the Companies Act, 1956 (1 of 1956)71;
(ii) a financial corporation which is a public sector company;
(iii) a banking company;
(iv) a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank;
(v) a housing finance company; and
(vi) any other financial corporation including a public company;
(b) “eligible business” means,—
72[(i) in respect of the specified entity referred to in sub-clause (i) or sub-clause (ii) or sub-clause (iii) or sub-clause (iv) of clause (a), the business of providing long-term finance for—
(A) industrial or agricultural development;
(B) development of infrastructure facility in India; or
(C) development of housing in India;]
(ii) in respect of the specified entity referred to in sub-clause (v) of clause (a), the business of providing long-term finance for the construction or purchase of houses in India for residential purposes; and
(iii) in respect of the specified entity referred to in sub-clause (vi) of clause (a), the business of providing long-term finance for development of infrastructure facility in India;
(c) “banking company” means a company to which the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act;
(d) “co-operative bank”, “primary agricultural credit society” and “primary co-operative agricultural and rural development bank” shall have the meanings respectively assigned to them in the Explanation to sub-section (4) of section 80P;
(e) “housing finance company” means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes;
(f) 73“public company” shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);
(g) “infrastructure facility” means—
(i) an infrastructure facility as defined in the Explanation to clause (i) of sub-section (4) of section 80-IA, or any other public facility of a similar nature as may be notified74 by the Board in this behalf in the Official Gazette and which fulfils the conditions as may be prescribed75;
(ii) an undertaking referred to in clause (ii) or clause (iii) or clause (iv) or clause (vi) of sub-section (4) of section 80-IA; and
(iii) an undertaking referred to in sub-section (10) of section 80-IB;
(h) “long-term finance” 75a means any loan or advance where the terms under which moneys are loaned or advanced provide for repayment along with interest thereof during a period of not less than five years;]
(viiia) 76[* * *]
77[(ix) any expenditure bona fide incurred by a company for the purpose of promoting family planning amongst its employees :
Provided that where such expenditure or any part thereof is of a capital nature, one-fifth of such expenditure shall be deducted for the previous year in which it was incurred; and the balance thereof shall be deducted in equal instalments for each of the four immediately succeeding previous years :
Provided further that the provisions of sub-section (2) of section 32 and of sub-section (2) of section 72 shall apply in relation to deductions allowable under this clause as they apply in relation to deductions allowable in respect of depreciation :
Provided further that the provisions of clauses (ii), (iii), (iv) and (v) of sub-section (2) 78[and sub-section (5)] of section 35, of sub-section (3) of section 41 and of Explanation 1 to clause (1) of section 43 shall, so far as may be, apply in relation to an asset representing expenditure of a capital nature for the purposes of promoting family planning as they apply in relation to an asset representing expenditure of a capital nature on scientific research;]
(x) 79[***]
80[(xi) any expenditure incurred by the assessee, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, wholly and exclusively in respect of a non-Y2K compliant computer system, owned by the assessee and used for the purposes of his business or profession, so as to make such computer system Y2K compliant computer system :
Provided that no such deduction shall be allowed in respect of such expenditure under any other provisions of this Act :
Provided further that no such deduction shall be admissible unless the assessee furnishes in the prescribed form81, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this clause.
Explanation.—For the purposes of this clause,—
(a) “computer system” means a device or collection of devices including input and output support devices and excluding calculators which are not programmable and capable of being used in conjunction with external files, or more of which contain computer programmes, electronic instructions, input data and output data, that performs functions including, but not limited to, logic, arithmetic, data storage and retrieval, communication and control;
(b) “Y2K compliant computer system” means a computer system capable of correctly processing, providing or receiving data relating to date within and between the twentieth and twenty-first century;]
82[(xii) any expenditure (not being in the nature of capital expenditure) incurred by a corporation or a body corporate, by whatever name called, if,—
(a) it is constituted or established by a Central, State or Provincial Act;
(b) such corporation or body corporate, having regard to the objects and purposes of the Act referred to in sub-clause (a), is notified83 by the Central Government in the Official Gazette for the purposes of this clause; and
(c) the expenditure is incurred for the objects and purposes authorised by the Act under which it is constituted or established;]
84[(xiii) any amount of banking cash transaction tax paid by the assessee during the previous year on the taxable banking transactions entered into by him.
Explanation.—For the purposes of this clause, the expressions “banking cash transaction tax” and “taxable banking transaction” shall have the same meanings respectively assigned to them under Chapter VII of the Finance Act, 2005;]
85[(xiv) any sum paid by a public financial institution by way of contribution to such credit guarantee fund trust for small industries as the Central Government may, by notification in the Official Gazette86, specify in this behalf.
Explanation.—For the purposes of this clause, “public financial institution” shall have the meaning assigned to it in section 4A87 of the Companies Act, 1956 (1 of 1956);]
88[(xv) an amount equal to the securities transaction tax paid by the assessee in respect of the taxable securities transactions entered into in the course of his business during the previous year, if the income arising from such taxable securities transactions is included in the income computed under the head “Profits and gains of business or profession” .
Explanation.—For the purposes of this clause, the expressions “securities transaction tax” and “taxable securities transaction” shall have the meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004 (23 of 2004);
89[(xvi) an amount equal to the commodities transaction tax paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such taxable commodities transactions is included in the income computed under the head “Profits and gains of business or profession” .
- —For the purposes of this clause, the expressions “comm-odities transaction tax” and “taxable commodities transaction” shall have the meanings respectively assigned to them under Chapter VII of the Finance Act, 2013.]]
90(2) In making any deduction for a bad debt or part thereof, the following provisions shall apply—
91[(i) no such deduction shall be allowed unless such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee;]
(ii) if the amount ultimately recovered on any such debt or part of debt is less than the difference between the debt or part and the amount so deducted, the deficiency shall be deductible in the previous year in which the ultimate recovery is made;
(iii) any such debt or part of debt may be deducted if it has already been written off as irrecoverable92 in the accounts of an earlier previous year 93[(being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year)], but the 94[Assessing] Officer had not allowed it to be deducted on the ground that it had not been established to have become a bad debt in that year;
(iv) where any such debt or part of debt is written off as irrecoverable in the accounts of the previous year 95[(being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year)] and the 94[Assessing] Officer is satisfied that such debt or part became a bad debt in any earlier previous year not falling beyond a period of four previous years immediately preceding the previous year in which such debt or part is written off, the provisions of sub-section (6) of section 155 shall apply;
96[(v) where such debt or part of debt relates to advances made by an assessee to which clause (viia) of sub-section (1) applies, no such deduction shall be allowed unless the assessee has debited the amount of such debt or part of debt in that previous year to the provision for bad and doubtful debts account made under that clause.]
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Section 37: General.
- 97 98(1) 99Any expenditure1 (not being expenditure of the nature described in sections 30 to 36 2[***] and not being in the nature of capital expenditure3 or personal expenses of the assessee), laid out or expended wholly and exclusively3 for the purposes of the business3 or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession” .
4[4a[Explanation.]—For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law5 shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.]
The following Explanation 2 shall be inserted after renumbered Explanation 1 to sub-section (1) of section 37 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Explanation 2.—For the removal of doubts, it is hereby declared that for the purposes of sub-section (1), any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013)5a shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession.
(2) 6[* * *]
7[8(2B) Notwithstanding anything contained in sub-section (1), no allowance shall be made in respect of expenditure incurred by an assessee on advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party.]
(3) 9[* * *]
(3A) 10[* * *]
(3B) 11[* * *]
(3C) 12[* * *]
(3D) 13[* * *]
(4) 14[* * *]
(5) 15[* * *]
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Section 38: Building, etc., partly used for business, etc., or not exclusively so used.
- 16 (1) Where a part of any premises is used as dwelling house by the assessee,—
(a) the deduction under sub-clause (i) of clause (a) of section 30, in the case of rent, shall be such amount as the 17[Assessing] Officer may determine having regard to the proportionate annual value of the part used for the purpose of the business or profession, and in the case of any sum paid for repairs, such sum as is proportionate to the part of the premises used for the purpose of the business or profession;
(b) the deduction under clause (b) of section 30 shall be such sum as the 17[Assessing] Officer may determine having regard to the part so used.
(2) Where any building, machinery, plant or furniture is not exclusively used for the purposes of the business or profession, the deductions under sub-clause (ii) of clause (a) and clause (c) of section 30, clauses (i) and (ii) of section 31 and 18[clause (ii) of sub-section (1)] of section 32 shall be restricted to a fair proportionate part thereof which the 17[Assessing] Officer may determine, having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession.
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Section 39: Managing agency commission.
- [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.]
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Section 40: Amounts not deductible.
- Notwithstanding anything to the contrary in sections 30 to 19[38], the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”,—
20(a) in the case of any assessee—
21[(i) any interest (not being interest on a loan issued for public subscription before the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable,—
(A) outside India; or
(B) in India to a non-resident, not being a company or to a foreign company,
on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid 22[during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of section 200] :
Provided that where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.
The following proviso shall be substituted for the existing proviso to sub-clause (i) of clause (a) of section 40 by the Finance (No. 2) Act, 2014, w.e.f 1-4-2015 :
Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.
Explanation.—For the purposes of this sub-clause,—
(A) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;
(B) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;
22a(ia) 22b[any interest, commission or brokerage, 23[rent, royalty,] fees for professional services or fees for technical services payable23a to a resident, or amounts payable23a to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work)], on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, 24[has not been paid23a on or before the due date23a specified in sub-section (1) of section 139 :]
25[Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, 25a[thirty per cent of] such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid :]
26[Provided further that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso.]
Explanation.—For the purposes of this sub-clause,—
(i) “commission or brokerage” shall have the same meaning as in clause (i) of the Explanation to section 194H;
(ii) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;
(iii) “professional services” shall have the same meaning as in clause (a) of the Explanation to section 194J;
(iv) “work” shall have the same meaning as in Explanation III to section 194C;
27[(v) “rent” shall have the same meaning as in clause (i) to the Explanation to section 194-I;
(vi) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;]
(ib) 28[***]]
29[(ic) any sum paid on account of fringe benefit tax under Chapter XIIH;]
30(ii) any sum paid on account of any rate or tax levied31 on the profits or gains of any business or profession31 or assessed at a proportion of, or otherwise on the basis of, any such profits or gains.
32[Explanation 1.—For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, any sum paid on account of any rate or tax levied includes and shall be deemed always to have included any sum eligible for relief of tax under section 90 or, as the case may be, deduction from the Indian income-tax payable under section 91.]
33[Explanation 2.—For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, any sum paid on account of any rate or tax levied includes any sum eligible for relief of tax under section 90A;]
34[35(iia) any sum paid on account of wealth-tax.
- —For the purposes of this sub-clause, “wealth-tax” means wealth-tax chargeable under the Wealth-tax Act, 1957 (27 of 1957), or any tax of a similar character chargeable under any law in force in any country outside India or any tax chargeable under such law with reference to the value of the assets of, or the capital employed in, a business or profession carried on by the assessee, whether or not the debts of the business or profession are allowed as a deduction in computing the amount with reference to which such tax is charged, but does not include any tax chargeable with reference to the value of any particular asset of the business or profession;]
36[(iib) any amount—
(A) paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on; or
(B) which is appropriated, directly or indirectly, from,
a State Government undertaking by the State Government.
- —For the purposes of this sub-clause, a State Government undertaking includes—
(i) a corporation established by or under any Act of the State Government;
(ii) a company in which more than fifty per cent of the paid-up equity share capital is held by the State Government;
(iii) a company in which more than fifty per cent of the paid-up equity share capital is held by the entity referred to in clause (i) or clause (ii) (whether singly or taken together);
(iv) a company or corporation in which the State Government has the right to appoint the majority of the directors or to control the management or policy decisions, directly or indirectly, including by virtue of its shareholding or management rights or shareholders agreements or voting agreements or in any other manner;
(v) an authority, a board or an institution or a body established or constituted by or under any Act of the State Government or owned or controlled by the State Government;]
37[(iii) any payment which is chargeable under the head “Salaries”, if it is payable—
(A) outside India; or
(B) to a non-resident,
and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;]
(iv) any payment to a provident or other fund established for the benefit of employees of the assessee, unless the assessee has made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund which are chargeable to tax under the head “Salaries” ;
38[(v) any tax actually paid by an employer referred to in clause (10CC) of section 10;]
39[(b) in the case of any firm assessable as such,—
(i) any payment of salary, bonus, commission or remuneration, by whatever name called (hereinafter referred to as “remuneration” ) to any partner who is not a working partner; or
(ii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is not authorised by, or is not in accordance with, the terms of the partnership deed; or
(iii) any payment of remuneration to any partner who is a working partner, or of interest to any partner, which, in either case, is authorised by, and is in accordance with, the terms of the partnership deed, but which relates to any period (falling prior to the date of such partnership deed) for which such payment was not authorised by, or is not in accordance with, any earlier partnership deed, so, however, that the period of authorisation for such payment by any earlier partnership deed does not cover any period prior to the date of such earlier partnership deed; or
(iv) any payment of interest to any partner which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as such amount exceeds the amount calculated at the rate of 40[twelve] per cent simple interest per annum; or
41(v) any payment of remuneration to any partner who is a working partner, which is authorised by, and is in accordance with, the terms of the partnership deed and relates to any period falling after the date of such partnership deed in so far as the amount of such payment to all the partners during the previous year exceeds the aggregate amount computed as hereunder :—
| 42[(a) on the first Rs. 3,00,000 of the book-profit or in case of a loss |
Rs. 1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more; |
| (b) on the balance of the book-profit |
at the rate of 60 per cent :] |
Provided that in relation to any payment under this clause to the partner during the previous year relevant to the assessment year commencing on the 1st day of April, 1993, the terms of the partnership deed may, at any time during the said previous year, provide for such payment.
Explanation 1.—Where an individual is a partner in a firm on behalf, or for the benefit, of any other person (such partner and the other person being hereinafter referred to as “partner in a representative capacity” and “person so represented”, respectively),—
(i) interest paid by the firm to such individual otherwise than as partner in a representative capacity, shall not be taken into account for the purposes of this clause;
(ii) interest paid by the firm to such individual as partner in a representative capacity and interest paid by the firm to the person so represented shall be taken into account for the purposes of this clause.
Explanation 2.—Where an individual is a partner in a firm otherwise than as partner in a representative capacity, interest paid by the firm to such individual shall not be taken into account for the purposes of this clause, if such interest is received by him on behalf, or for the benefit, of any other person.
Explanation 3.—For the purposes of this clause, “book-profit” means the net profit, as shown in the profit and loss account for the relevant previous year, computed in the manner laid down in Chapter IV-D as increased by the aggregate amount of the remuneration paid or payable to all the partners of the firm if such amount has been deducted while computing the net profit.
Explanation 4.—For the purposes of this clause, “working partner” means an individual who is actively engaged in conducting the affairs of the business or profession of the firm of which he is a partner;]
43[(ba) in the case of an association of persons or body of individuals [other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], any payment of interest, salary, bonus, commission or remuneration, by whatever name called, made by such association or body to a member of such association or body.
Explanation 1.—Where interest is paid by an association or body to any member thereof who has also paid interest to the association or body, the amount of interest to be disallowed under this clause shall be limited to the amount by which the payment of interest by the association or body to the member exceeds the payment of interest by the member to the association or body.
Explanation 2.—Where an individual is a member of an association or body on behalf, or for the benefit, of any other person (such member and the other person being hereinafter referred to as “member in a representative capacity” and “person so represented”, respectively),—
(i) interest paid by the association or body to such individual or by such individual to the association or body otherwise than as member in a representative capacity, shall not be taken into account for the purposes of this clause;
(ii) interest paid by the association or body to such individual or by such individual to the association or body as member in a representative capacity and interest paid by the association or body to the person so represented or by the person so represented to the association or body, shall be taken into account for the purposes of this clause.
Explanation 3.—Where an individual is a member of an association or body otherwise than as member in a representative capacity, interest paid by the association or body to such individual shall not be taken into account for the purposes of this clause, if such interest is received by him on behalf, or for the benefit, of any other person.]
(c) [Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, it was amended by the Finance Act, 1963, w.e.f. 1-4-1963, Finance Act, 1964, w.e.f. 1-4-1964, Finance Act, 1965, w.e.f. 1-4-1965, Finance Act, 1968, w.e.f. 1-4-1969, Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, Finance Act, 1984, w.e.f. 1-4-1985 and Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988.]
(d) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1989.]
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Section 40A: 44[Expenses or payments not deductible in certain circumstances.
4540A. (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head “Profits and gains of business or profession” .
46(2)(a) Where the assessee incurs any expenditure in respect of which payment has been or is to be made to any person47 referred to in clause (b) of this sub-section, and the 48[Assessing] Officer is of opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction :
49[Provided that no disallowance, on account of any expenditure being excessive or unreasonable having regard to the fair market value, shall be made in respect of a specified domestic transaction referred to in section 92BA, if such transaction is at arm’s length price as defined in clause (ii) of section 92F.]
(b) The persons referred to in clause (a) are the following, namely :—
| (i) where the assessee is an individual |
|
any relative of the assessee; |
| (ii) where the assessee is a company, firm, association of persons or Hindu undivided family |
|
any director of the company, partner of the firm, or member of the association or family, or any relative of such director, partner or member; |
(iii) any individual who has a substantial interest in the business or profession of the assessee, or any relative of such individual;
(iv) a company, firm, association of persons or Hindu undivided family having a substantial interest in the business or profession of the assessee or any director, partner or member of such company, firm, association or family, or any relative of such director, partner or member 50[or any other company carrying on business or profession in which the first mentioned company has substantial interest];
(v) a company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has a substantial interest in the business or profession of the assessee; or any director, partner or member of such company, firm, association or family or any relative of such director, partner or member;
(vi) any person who carries on a business or profession,—
(A) where the assessee being an individual, or any relative of such assessee, has a substantial interest in the business or profession of that person; or
(B) where the assessee being a company, firm, association of persons or Hindu undivided family, or any director of such company, partner of such firm or member of the association or family, or any relative of such director, partner or member, has a substantial interest in the business or profession of that person.
- —For the purposes of this sub-section, a person shall be deemed to have a substantial interest in a business or profession, if,—
(a) in a case where the business or profession is carried on by a company, such person is, at any time during the previous year, the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) carrying not less than twenty per cent of the voting power; and
(b) in any other case, such person is, at any time during the previous year, beneficially entitled to not less than twenty per cent of the profits of such business or profession.
51[52(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.53
(3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year (hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees:
Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3) and this sub-section where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, in such cases and under such circumstances as may be prescribed54, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors :]
55[Provided further that in the case of payment made for plying, hiring or leasing goods carriages, the provisions of sub-sections (3) and (3A) shall have effect as if for the words “twenty thousand rupees”, the words “thirty-five thousand rupees” had been substituted.]
56[(4) Notwithstanding anything contained in any other law for the time being in force or in any contract, where any payment in respect of any expenditure has to be made by 57[an account payee cheque drawn on a bank or account payee bank draft] in order that such expenditure may not be disallowed as a deduction under sub-section (3), then the payment may be made by such cheque or draft; and where the payment is so made or tendered, no person shall be allowed to raise, in any suit or other proceeding, a plea based on the ground that the payment was not made or tendered in cash or in any other manner.]
(5) 58[Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original sub-section (5) was inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972.]
(6) 59[Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Original sub-section (6) was inserted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972.]
60[61(7) (a) Subject to the provisions of clause (b), no deduction shall be allowed in respect of any provision62 (whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment for any reason.
(b) Nothing in clause (a) shall apply in relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year63.
Explanation.—For the removal of doubts, it is hereby declared that where any provision made by the assessee for the payment of gratuity to his employees on their retirement or termination of their employment for any reason has been allowed as a deduction in computing the income of the assessee for any assessment year, any sum paid out of such provision by way of contribution towards an approved gratuity fund or by way of gratuity to any employee shall not be allowed as a deduction in computing the income of the assessee of the previous year in which the sum is so paid.]
(8) 64[* * *]
65[(9) No deduction shall be allowed in respect of any sum paid by the assessee as an employer towards the setting up or formation of, or as contribution to, any fund, trust, company, association of persons, body of individuals, society registered under the Societies Registration Act, 1860 (21 of 1860), or other institution for any purpose, except where such sum is so paid, for the purposes and to the extent provided by or under clause (iv) 66[or clause (iva)] or clause (v) of sub-section (1) of section 36, or as required by or under any other law for the time being in force.
(10) Notwithstanding anything contained in sub-section (9), where the 67[Assessing] Officer is satisfied that the fund, trust, company, association of persons, body of individuals, society or other institution referred to in that sub-section has, before the 1st day of March, 1984, bona fide laid out or expended any expenditure (not being in the nature of capital expenditure) wholly and exclusively for the welfare of the employees of the assessee referred to in sub-section (9) out of the sum referred to in that sub-section, the amount of such expenditure shall, in case no deduction has been allowed to the assessee in respect of such sum and subject to the other provisions of this Act, be deducted in computing the income referred to in section 28 of the assessee of the previous year in which such expenditure is so laid out or expended, as if such expenditure had been laid out or expended by the assessee.]
68[(11) Where the assessee has, before the 1st day of March, 1984, paid any sum to any fund, trust, company, association of persons, body of individuals, society or other institution referred to in sub-section (9), then, notwithstanding anything contained in any other law or in any instrument, he shall be entitled—
(i) to claim that so much of the amount paid by him as has not been laid out or expended by such fund, trust, company, association of persons, body of individuals, society or other institution (such amount being hereinafter referred to as the unutilised amount) be repaid to him, and where any claim is so made, the unutilised amount shall be repaid, as soon as may be, to him;
(ii) to claim that any asset, being land, building, machinery, plant or furniture acquired or constructed by the fund, trust, company, association of persons, body of individuals, society or other institution out of the sum paid by the assessee, be transferred to him, and where any claim is so made, such asset shall be transferred, as soon as may be, to him.]
(12) 69[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 41: Profits chargeable to tax.
- 70[71(1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subse-quently during any previous year,—
(a) the first-mentioned person has obtained72, whether in cash or in any other manner whatsoever, any amount in respect of such72 loss or expenditure72 or some benefit in respect of such trading liability72 by way of remission or cessation thereof72, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or
(b) the successor in business has obtained72, whether in cash or in any other manner whatsoever, any amount in respect of which loss or expenditure was incurred by the first-mentioned person or some benefit in respect of the trading liability referred to in clause (a) by way of remission or cessation thereof72, the amount obtained72 by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year.
73[Explanation 1.—For the purposes of this sub-section, the expression “loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof” shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts.]
74[Explanation 2].—For the purposes of this sub-section, “successor in business” means,—
(i) where there has been an amalgamation of a company with another company, the amalgamated company;
(ii) where the first-mentioned person is succeeded by any other person in that business or profession, the other person;
(iii) where a firm carrying on a business or profession is succeeded by another firm, the other firm;]
75[(iv) where there has been a demerger, the resulting company.]
76[(2) Where any building, machinery, plant or furniture,—
(a) which is owned by the assessee;
(b) in respect of which depreciation is claimed under clause (i) of sub-section (1) of section 32; and
(c) which was or has been used for the purposes of business,
is sold77, discarded, demolished or destroyed77 and the moneys payable77 in respect of such building, machinery, plant or furniture, as the case may be, together with the amount of scrap value, if any, exceeds the written down value, so much of the excess as does not exceed the difference between the actual cost and the written down value shall be chargeable to income-tax as income of the business of the previous year in which the moneys payable for the building, machinery, plant or furniture became due77.
Explanation.—Where the moneys payable in respect of the building, machinery, plant or furniture referred to in this sub-section become due in a previous year in which the business for the purpose of which the building, machinery, plant or furniture was being used is no longer in existence, the provision of this sub-section shall apply as if the business is in existence in that previous year.]
(2A) 78[***]
(3) Where an asset representing expenditure of a capital nature on scientific research within the meaning of clause (iv) of sub-section (1), 79[or clause (c) of sub-section (2B),] of section 35, read with clause (4) of section 43, is sold, without having been used for other purposes, and the proceeds of the sale together with the total amount of the deductions made under clause (i) 80[or, as the case may be, the amount of the deduction under clause (ia)] of sub-section (2), 81[or clause (c) of sub-section (2B),] of section 35 exceed the amount of the capital expenditure, the excess or the amount of the deductions so made, whichever is the less, shall be chargeable to income-tax as income of the business or profession of the previous year in which the sale took place.
- —Where the moneys payable in respect of any asset referred to in this sub-section become due in a previous year in which the business is no longer in existence, the provisions of this sub-section shall apply as if the business is in existence in that previous year.
82(4) Where a deduction has been allowed in respect of a bad debt or part of debt under the provisions of clause (vii) of sub-section (1) of section 36, then, if the amount subsequently recovered on any such debt or part is greater than the difference between the debt or part of debt and the amount so allowed, the excess shall be deemed to be profits and gains of business or profession, and accordingly chargeable to income-tax as the income of the previous year in which it is recovered, whether the business or profession in respect of which the deduction has been allowed is in existence in that year or not.
83[Explanation.—For the purposes of sub-section (3),—
(1) “moneys payable” in respect of any building, machinery, plant or furniture includes—
(a) any insurance, salvage or compensation moneys payable in respect thereof;
(b) where the building, machinery, plant or furniture is sold, the price for which it is sold,
so, however, that where the actual cost of a motor car is, in accordance with the proviso to clause (1) of section 43, taken to be twenty-five thousand rupees, the moneys payable in respect of such motor car shall be taken to be a sum which bears to the amount for which the motor car is sold or, as the case may be, the amount of any insurance, salvage or compensation moneys payable in respect thereof (including the amount of scrap value, if any) the same proportion as the amount of twenty-five thousand rupees bears to the actual cost of the motor car to the assessee as it would have been computed before applying the said proviso;
(2) “sold” includes a transfer by way of exchange or a compulsory acquisition under any law for the time being in force but does not include a transfer, in a scheme of amalgamation, of any asset by the amalgamating company to the amalgamated company where the amalgamated company is an Indian company.]
84[(4A) Where a deduction has been allowed in respect of any special reserve created and maintained under clause (viii) of sub-section (1) of section 36, any amount subsequently withdrawn from such special reserve shall be deemed to be the profits and gains of business or profession and accordingly be chargeable to income-tax as the income of the previous year in which such amount is withdrawn.
Explanation.—Where any amount is withdrawn from the special reserve in a previous year in which the business is no longer in existence, the provisions of this sub-section shall apply as if the business is in existence in that previous year.]
(5) Where the business or profession referred to in this section is no longer in existence and there is income chargeable to tax under sub-section (1), 85[***] sub-section (3) 86[, sub-section (4) or sub-section (4A)] in respect of that business or profession, any loss, not being a loss sustained in speculation business 87[***], which arose in that business or profession during the previous year in which it ceased to exist and which could not be set off against any other income of that previous year shall, so far as may be, be set off against the income chargeable to tax under the sub-sections aforesaid.
88[(6) References in sub-section (3) to any other provision of this Act which has been amended or omitted by the Direct Tax Laws (Amendment) Act, 1987 shall, notwithstanding such amendment or omission, be construed, for the purposes of that sub-section, as if such amendment or omission had not been made.]
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Section 42: Special provision for deductions in the case of business for prospecting, etc., for mineral oil.
- 89[(1)] For the purpose of computing the profits or gains of any business consisting of the prospecting for or extraction or production of mineral oils in relation to which the Central Government has entered into an agreement with any person for the association or participation 90[of the Central Government or any person authorised by it in such business] (which agreement has been laid on the Table of each House of Parliament), there shall be made in lieu of, or in addition to, the allowances admissible under this Act, such allowances as are specified in the agreement in relation—
(a) to expenditure by way of infructuous or abortive exploration expen-ses in respect of any area surrendered prior to the beginning of commercial production by the assessee ;
(b) after the beginning of commercial production, to expenditure incurred by the assessee, whether before or after such commercial production, in respect of drilling or exploration activities or services or in respect of physical assets used in that connection, except assets on which allowance for depreciation is admissible under section 32 :
91[***]
92[Provided that in relation to any agreement entered into after the 31st day of March, 1981, this clause shall have effect subject to the modification that the words and figures “except assets on which allowance for depreciation is admissible under section 32″ had been omitted; and]
(c) to the depletion of mineral oil in the mining area in respect of the assessment year relevant to the previous year in which commercial production is begun and for such succeeding year or years as may be specified in the agreement;
and such allowances shall be computed and made in the manner specified in the agreement, the other provisions of this Act being deemed for this purpose to have been modified to the extent necessary to give effect to the terms of the agreement.
93[(2) Where the business of the assessee consisting of the prospecting for or extraction or production of petroleum and natural gas is transferred wholly or partly or any interest in such business is transferred in accordance with the agreement referred to in sub-section (1), subject to the provisions of the said agreement and where the proceeds of the transfer (so far as they consist of capital sums)—
(a) are less than the expenditure incurred remaining unallowed, a deduction equal to such expenditure remaining unallowed, as reduced by the proceeds of transfer, shall be allowed in respect of the previous year in which such business or interest, as the case may be, is transferred;
(b) exceed the amount of the expenditure incurred remaining unallowed, so much of the excess as does not exceed the difference between the expenditure incurred in connection with the business or to obtain interest therein and the amount of such expenditure remaining unallowed, shall be chargeable to income-tax as profits and gains of the business in the previous year in which the business or interest therein, whether wholly or partly, had been transferred :
Provided that in a case where the provisions of this clause do not apply, the deduction to be allowed for expenditure incurred remaining unallowed shall be arrived at by subtracting the proceeds of transfer (so far as they consist of capital sums) from the expenditure remaining unallowed.
Explanation.—Where the business or interest in such business is transferred in a previous year in which such business carried on by the assessee is no longer in existence, the provisions of this clause shall apply as if the business is in existence in that previous year;
(c) are not less than the amount of the expenditure incurred remaining unallowed, no deduction for such expenditure shall be allowed in respect of the previous year in which the business or interest in such business is transferred or in respect of any subsequent year or years:
94[Provided that where in a scheme of amalgamation or demerger, the amalga-mating or the demerged company sells or otherwise transfers the business to the amalgamated or the resulting company (being an Indian company), the provisions of this sub-section—
(i) shall not apply in the case of the amalgamating or the demerged company; and
(ii) shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the latter had not transferred the business or interest in the business.]]
95[Explanation.—For the purposes of this section, “mineral oil” includes petroleum and natural gas.]
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Section 43: Definitions of certain terms relevant to income from profits and gains of business or profession.
- In sections 28 to 41 and in this section, unless the context otherwise requires96—
97(1) “actual cost” means the actual cost96 of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met96 directly or indirectly by any other person or authority:
98[Provided that where the actual cost of an asset, being a motor car which is acquired by the assessee after the 31st day of March, 1967, 99[but before the 1st day of March, 1975,] and is used otherwise than in a business of running it on hire for tourists, exceeds twenty-five thousand rupees, the excess of the actual cost over such amount shall be ignored, and the actual cost thereof shall be taken to be twenty-five thousand rupees.]
Explanation 1.—Where an asset is used in the business after it ceases to be used for scientific research related to that business and a deduction has to be made under 1[clause (ii) of sub-section (1)] of section 32 in respect of that asset, the actual cost of the asset to the assessee shall be the actual cost to the assessee as reduced by the amount of any deduction allowed under clause (iv) of sub-section (1) of section 35 or under any corresponding provision of the Indian Income-tax Act, 1922 (11 of 1922).
2[Explanation 2.—Where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the actual cost to the previous owner, as reduced by—
(a) the amount of depreciation actually allowed under this Act and the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only asset in the relevant block of assets.]
Explanation 3.—Where, before the date of acquisition by the assessee, the assets were at any time used by any other person for the purposes of his business or profession and the 3[Assessing] Officer is satisfied that the main purpose of the transfer of such assets, directly or indirectly to the assessee, was the reduction of a liability to income-tax (by claiming depreciation with reference to an enhanced cost), the actual cost to the assessee shall be such an amount as the 3[Assessing] Officer may, with the previous approval of the 4[Joint Commissioner], determine having regard to all the circumstances of the case.
5[Explanation 4.—Where any asset which had once belonged to the assessee and had been used by him for the purposes of his business or profession and thereafter ceased to be his property by reason of transfer or otherwise, is re-acquired by him, the actual cost to the assessee shall be—
(i) the actual cost to him when he first acquired the asset as reduced by—
(a) the amount of depreciation actually allowed to him under this Act or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only asset in the relevant block of assets; or
(ii) the actual price for which the asset is re-acquired by him,
whichever is less.]
6[Explanation 4A.—Where before the date of acquisition by the assessee (hereinafter referred to as the first mentioned person), the assets were at any time used by any other person (hereinafter referred to as the second mentioned person) for the purposes of his business or profession and depreciation allowance has been claimed in respect of such assets in the case of the second mentioned person and such person acquires on lease, hire or otherwise assets from the first mentioned person, then, notwithstanding anything contained in Explanation 3, the actual cost of the transferred assets, in the case of first mentioned person, shall be the same as the written down value of the said assets at the time of transfer thereof by the second mentioned person.]
Explanation 5.—Where a building previously the property of the assessee is brought into use for the purpose of the business or profession after the 28th day of February, 1946, the actual cost to the assessee shall be the actual cost of the building to the assessee, as reduced by an amount equal to the depreciation calculated at the rate in force on that date that would have been allowable had the building been used for the aforesaid purposes since the date of its acquisition by the assessee.
7[Explanation 6.—When any capital asset is transferred by a holding company to its subsidiary company or by a subsidiary company to its holding company, then, if the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied, the actual cost of the transferred capital asset to the transferee-company shall be taken to be the same as it would have been if the transferor-company had continued to hold the capital asset for the purposes of its business.]
8[Explanation 7.—Where, in a scheme of amalgamation, any capital asset is transferred by the amalgamating company to the amalga-mated company and the amalgamated company is an Indian com-pany, the actual cost of the transferred capital asset to the amalga-mated company shall be taken to be the same as it would have been if the amalgamating company had continued to hold the capital asset for the purposes of its own business.]
9[Explanation 7A.—Where, in a demerger, any capital asset is transferred by the demerged company to the resulting company and the resulting company is an Indian company, the actual cost of the transferred capital asset to the resulting company shall be taken to be the same as it would have been if the demerged company had continued to hold the capital asset for the purpose of its own business :
Provided that such actual cost shall not exceed the written down value of such capital asset in the hands of the demerged company.]
10[Explanation 8.—For the removal of doubts, it is hereby declared that where any amount is paid or is payable as interest in connection with the acquisition of an asset, so much of such amount as is relatable to any period after such asset is first put to use shall not be included, and shall be deemed never to have been included, in the actual cost of such asset.]
11[Explanation 9.—For the removal of doubts, it is hereby declared that where an asset is or has been acquired on or after the 1st day of March, 1994 by an assessee, the actual cost of asset shall be reduced by the amount of duty of excise or the additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of which a claim of credit has been made and allowed under the Central Excise Rules, 1944.]
12[Explanation 10.—Where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as is relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee :
Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with reference to which the subsidy or grant or reimbursement is so received, shall not be included in the actual cost of the asset to the assessee.]
13[Explanation 11.—Where an asset which was acquired outside India by an assessee, being a non-resident, is brought by him to India and used for the purposes of his business or profession, the actual cost of the asset to the assessee shall be the actual cost to the assessee, as reduced by an amount equal to the amount of depreciation calculated at the rate in force that would have been allowable had the asset been used in India for the said purposes since the date of its acquisition by the assessee.]
14[Explanation 12.—Where any capital asset is acquired by the assessee under a scheme for corporatisation of a recognised stock exchange in India, approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the actual cost of the asset shall be deemed to be the amount which would have been regarded as actual cost had there been no such corporatisation;]
15[Explanation 13.—The actual cost of any capital asset on which deduction has been allowed or is allowable to the assessee under section 35AD, shall be treated as “nil,—
(a) in the case of such assessee; and
(b) in any other case if the capital asset is acquired or received,—
(i) by way of gift or will or an irrevocable trust;
(ii) on any distribution on liquidation of the company; and
(iii) by such mode of transfer as is referred to in clauses (i), (iv), (v), (vi), (vib), 16[(xiii), (xiiib) and (xiv)] of section 47;]
(2) “paid” means actually paid17 or incurred according to the method of accounting upon the basis of which the profits or gains are computed under the head “Profits and gains of business or profession” ;
18(3) “plant” 19 includes ships, vehicles, books19, scientific apparatus and surgical equipment used for the purposes of the business or profession 20[but does not include tea bushes or livestock] 21[or buildings or furniture and fittings];
(4) 22[(i) “scientific research” 19 means any activities for the extension of knowledge in the fields of natural or applied science including agriculture, animal husbandry or fisheries;]
(ii) references to expenditure incurred on scientific research include all expenditure incurred for the prosecution, or the provision of facilities for the prosecution, of scientific research, but do not include any expenditure incurred in the acquisition of rights in, or arising out of, scientific research;
(iii) references to scientific research related to a business or class of business include—
(a) any scientific research which may lead to or facilitate an extension of that business or, as the case may be, all businesses of that class;
(b) any scientific research of a medical nature which has a special relation to the welfare of workers employed in that business or, as the case may be, all businesses of that class;
23(5) 24“speculative transaction” 25 means a transaction in which a contract25 for the purchase or sale of any commodity25, including stocks and shares25, is periodically or ultimately25 settled25 otherwise than by the actual delivery25 or transfer of the commodity or scrips:
Provided that for the purposes of this clause—
(a) a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; or
(b) a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or
(c) a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard against loss which may arise in the ordinary course of his business as such member; 26[or]
26[(d) an eligible transaction in respect of trading in derivatives26a referred to in clause 27[(ac)] of section 228 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange; 29[or]]
29[(e) an eligible transaction in respect of trading in commodity derivatives26a carried out in a recognised association 29a[, which is chargeable to commodities transaction tax under Chapter VII of the Finance Act, 2013 (17 of 2013),]]
shall not be deemed to be a speculative transaction.
30[31[Explanation 1].—For the purposes of 32[clause (d)], the expressions—
(i) “eligible transaction” means any transaction,—
(A) carried out electronically on screen-based systems through a stock broker or sub-broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) and the rules, regulations or bye-laws made or directions issued under those Acts or by banks or mutual funds on a recognised stock exchange; and
(B) which is supported by a time stamped contract note issued by such stock broker or sub-broker or such other intermediary to every client indicating in the contract note the unique client identity number allotted under any Act referred to in sub-clause (A) and permanent account number allotted under this Act;
(ii) “recognised stock exchange” means a recognised stock exchange as referred to in clause (f) of section 233 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfils such conditions as may be prescribed and notified34 by the Central Government for this purpose;]
35[Explanation 2.—For the purposes of clause (e), the expressions—
(i) “commodity derivative” shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013;
(ii) “eligible transaction” means any transaction,—
(A) carried out electronically on screen-based systems through member or an intermediary, registered under the bye-laws, rules and regulations of the recognised association for trading in commodity derivative in accordance with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and the rules, regulations or bye-laws made or directions issued under that Act on a recognised association; and
(B) which is supported by a time stamped contract note issued by such member or intermediary to every client indicating in the contract note, the unique client identity number allotted under the Act, rules, regulations or bye-laws referred to in sub-clause (A), unique trade number and permanent account number allotted under this Act;
(iii) “recognised association” means a recognised association as referred to in clause (j) of section 236 of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and which fulfils such conditions as may be prescribed36a and is notified36b by the Central Government for this purpose;]
37(6) “written down value” means—
(a) in the case of assets acquired in the previous year, the actual cost to the assessee;
(b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed38 to him under this Act, or under the Indian Income-tax Act, 1922 (11 of 1922), or any Act repealed by that Act, or under any executive orders issued when the Indian Income-tax Act, 1886 (2 of 1886), was in force:
39[Provided that in determining the written down value in respect of buildings, machinery or plant for the purposes of clause (ii) of sub-section (1) of section 32, “depreciation actually allowed” shall not include depreciation allowed under sub-clauses (a), (b) and (c) of clause (vi) of sub-section (2) of section 10 of the Indian Income-tax Act, 1922 (11 of 1922), where such depreciation was not deductible in determining the written down value for the pur-poses of the said clause (vi);]
40[(c) in the case of any block of assets,—
(i) in respect of any previous year relevant to the assessment year commencing on the 1st day of April, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted,—
(A) by the increase by the actual cost of any asset falling within that block, acquired during the previous year;
(B) by the reduction of the moneys payable in respect of any asset falling within that block, which is sold or discarded or demolished or destroyed during that previous year together with the amount of the scrap value, if any, so, however, that the amount of such reduction does not exceed the written down value as so increased; and
41[(C) in the case of a slump sale, decrease by the actual cost of the asset falling within that block as reduced—
(a) by the amount of depreciation actually allowed to him under this Act or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922) in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) by the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988 as if the asset was the only asset in the relevant block of assets,
so, however, that the amount of such decrease does not exceed the written down value;]
(ii) in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i).]
Explanation 1.—When in a case of succession in business or profession, an assessment is made on the successor under sub-section (2) of section 170 the written down value of 42[any asset or any block of assets] shall be the amount which would have been taken as its written down value if the assessment had been made directly on the person succeeded to.
43[Explanation 2.—Where in any previous year, any block of assets is transferred,—
(a) by a holding company to its subsidiary company or by a subsidiary company to its holding company and the conditions of clause (iv) or, as the case may be, of clause (v) of section 47 are satisfied; or
(b) by the amalgamating company to the amalgamated company in a scheme of amalgamation, and the amalgamated company is an Indian company,
then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the transferee-company or the amalgamated company, as the case may be, shall be the written down value of the block of assets as in the case of the transferor-company or the amalgamating company for the immediately preceding previous year as reduced by the amount of depreciation actually allowed in relation to the said preceding previous year.]
44[Explanation 2A.—Where in any previous year, any asset forming part of a block of assets is transferred by a demerged company to the resulting company, then, notwithstanding anything contained in clause (1), the written down value of the block of assets of the demerged company for the immediately preceding previous year shall be reduced by the 45[written down value of the assets] trans-ferred to the resulting company pursuant to the demerger.
Explanation 2B.—Where in a previous year, any asset forming part of a block of assets is transferred by a demerged company to the resulting company, then, notwithstanding anything contained in clause (1), the written down value of the block of assets in the case of the resulting company shall be the 46[written down value of the transferred assets 47[***] of the demerged company immediately before the demerger.
48[Explanation 2C.—Where in any previous year, any block of assets is transferred by a private company or unlisted public company to a limited liability partnership and the conditions specified in the proviso to clause (xiiib) of section 47 are satisfied, then, notwithstanding anything contained in clause (1), the actual cost of the block of assets in the case of the limited liability partnership shall be the written down value of the block of assets as in the case of the said company on the date of conversion of the company into the limited liability partnership.]
49[***]]
Explanation 3.—Any allowance in respect of any depreciation carried forward under sub-section (2) of section 32 shall be deemed to be depreciation “actually allowed” .
50[Explanation 4.—For the purposes of this clause, the expressions “moneys payable” and “sold” shall have the same meanings as in the Explanation below sub-section (4) of section 41.]
51[Explanation 5.—Where in a previous year, any asset forming part of a block of assets is transferred by a recognised stock exchange in India to a company under a scheme for corporatisation approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the written down value of the block of assets in the case of such company shall be the written down value of the transferred assets immediately before such transfer.]
52[Explanation 6.—Where an assessee was not required to compute his total income for the purposes of this Act for any previous year or years preceding the previous year relevant to the assessment year under consideration,—
(a) the actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account;
(b) the total amount of depreciation on such asset, provided in the books of account of the assessee in respect of such previous year or years preceding the previous year relevant to the assessment year under consideration shall be deemed to be the depreciation actually allowed under this Act for the purposes of this clause; and
(c) the depreciation actually allowed under clause (b) shall be adjusted by the amount of depreciation attributable to such revaluation of the asset.]
53[Explanation 7.—For the purposes of this clause, where the income of an assessee is derived, in part from agriculture and in part from business chargeable to income-tax under the head “Profits and gains of business or profession”, for computing the written down value of assets acquired before the previous year, the total amount of depreciation shall be computed as if the entire income is derived from the business of the assessee under the head “Profits and gains of business or profession” and the depreciation so computed shall be deemed to be the depreciation actually allowed under this Act.]
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Section 43A: 54[Special provisions consequential to changes in rate of exchange of currency.
- Notwithstanding anything contained in any other provision of this Act, where an assessee has acquired any asset in any previous year from a country outside India for the purposes of his business or profession and, in consequence of a change in the rate of exchange during any previous year after the acquisition of such asset, there is an increase or reduction in the liability of the assessee as expressed in Indian currency (as compared to the liability existing at the time of acquisition of the asset) at the time of making payment—
(a) towards the whole or a part of the cost of the asset; or
(b) towards repayment of the whole or a part of the moneys borrowed by him from any person, directly or indirectly, in any foreign currency specifically for the purpose of acquiring the asset along with interest, if any,
the amount by which the liability as aforesaid is so increased or reduced during such previous year and which is taken into account at the time of making the payment, irrespective of the method of accounting adopted by the assessee, shall be added to, or, as the case may be, deducted from—
(i) the actual cost of the asset as defined in clause (1) of section 43; or
(ii) the amount of expenditure of a capital nature referred to in clause (iv) of sub-section (1) of section 35; or
(iii) the amount of expenditure of a capital nature referred to in section 35A; or
(iv) the amount of expenditure of a capital nature referred to in clause (ix) of sub-section (1) of section 36; or
(v) the cost of acquisition of a capital asset (not being a capital asset referred to in section 50) for the purposes of section 48,
and the amount arrived at after such addition or deduction shall be taken to be the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset as aforesaid:
Provided that where an addition to or deduction from the actual cost or expenditure or cost of acquisition has been made under this section, as it stood immediately before its substitution by the Finance Act, 2002, on account of an increase or reduction in the liability as aforesaid, the amount to be added to, or, as the case may be, deducted under this section from, the actual cost or expendi-ture or cost of acquisition at the time of making the payment shall be so adjusted that the total amount added to, or, as the case may be, deducted from, the actual cost or expenditure or cost of acquisition, is equal to the increase or reduction in the aforesaid liability taken into account at the time of making payment.
Explanation 1.—In this section, unless the context otherwise requires,—
(a) “rate of exchange” means the rate of exchange determined or recognised by the Central Government for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;
(b) 55“foreign currency” and “Indian currency” have the meanings respectively assigned to them in section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
Explanation 2.—Where the whole or any part of the liability aforesaid is met, not by the assessee, but, directly or indirectly, by any other person or authority, the liability so met shall not be taken into account for the purposes of this section.
Explanation 3.—Where the assessee has entered into a contract with an authorised dealer56 as defined in section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999), for providing him with a specified sum in a foreign currency on or after a stipulated future date at the rate of exchange specified in the contract to enable him to meet the whole or any part of the liability aforesaid, the amount, if any, to be added to, or deducted from, the actual cost of the asset or the amount of expenditure of a capital nature or, as the case may be, the cost of acquisition of the capital asset under this section shall, in respect of so much of the sum specified in the contract as is available for discharging the liability aforesaid, be computed with reference to the rate of exchange specified therein.]
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Section 43B: 57[Certain deductions to be only on actual payment57a.
5843B. 59Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of—
60[(a) any sum payable by the assessee by way of tax61, duty, cess or fee, by whatever name called, under any law for the time being in force, or]
(b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, 62[or]
62[(c) any sum referred to in clause (ii) of sub-section (1) of section 36,] 63[or]
63[(d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution 64[or a State financial corporation or a State industrial investment corporation], in accordance with the terms and conditions of the agreement governing such loan or borrowing 65[, or]
65[(e) any sum payable by the assessee as interest on any 66[loan or advances] from a scheduled bank in accordance with the terms and conditions of the agreement governing such loan 67[or advances],] 68[or]
68[(f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee,]
shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him :
69[Provided that nothing contained in this section shall apply in relation to any sum 70[***] which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return71.
72[***]]
Explanation 73[1].—For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commenc-ing on the 1st day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.]
74[Explanation 2.—For the purposes of clause (a), as in force at all material times, “any sum payable” means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law.]
75[76[Explanation 3].—For the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (c) 77[or clause (d)] of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.]
78[Explanation 3A.—For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (e) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1996, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.]
79[Explanation 3B.—For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (f) of this section is allowed in computing the income, referred to in section 28, of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 2001, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.]
80[Explanation 3C.—For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (d) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or borrowing shall not be deemed to have been actually paid.]
81[Explanation 3D.—For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (e) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or advance shall not be deemed to have been actually paid.]
82[Explanation 4.—For the purposes of this section,—
(a) “public financial institutions” shall have the meaning assigned to it in section 4A83 of the Companies Act, 1956 (1 of 1956);
84[(aa) “scheduled bank” shall have the meaning assigned to it in the Explanation to clause (iii) of sub-section (5) of section 11;]
(b) “State financial corporation” means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951);
(c) “State industrial investment corporation” means a Government company85 within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects and 86[eligible for deduction under clause (viii) of sub-section (1) of section 36].]
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Section 43C: 87[Special provision for computation of cost of acquisition of certain assets.
- (1) Where an asset [not being an asset referred to in sub-section (2) of section 45] which becomes the property of an amalgamated company under a scheme of amalgamation, is sold after the 29th day of February, 1988, by the amalgamated company as stock-in-trade of the business carried on by it, the cost of acquisition of the said asset to the amalgamated company in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the amalgamating company, as increased by the cost, if any, of any improvement made thereto, and the expenditure, if any, incurred, wholly and exclusively in connection with such transfer by the amalgamating company.
(2) Where an asset [not being an asset referred to in sub-section (2) of section 45] which becomes the property of the assessee on the total or partial partition of a Hindu undivided family or under a gift or will or an irrevocable trust, is sold after the 29th day of February, 1988, by the assessee as stock-in-trade of the business carried on by him, the cost of acquisition of the said asset to the assessee in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the transferor or the donor, as the case may be, as increased by the cost, if any, of any improvement made thereto, and the expenditure, if any, incurred, wholly and exclusively in connection with such transfer (by way of effecting the partition, acceptance of the gift, obtaining probate in respect of the will or the creation of the trust), including the payment of gift-tax, if any, incurred by the transferor or the donor, as the case may be.]
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Section 43CA: 88[Special provision for full value of consideration for transfer of assets other than capital assets in certain cases.
- (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer.
(2) The provisions of sub-section (2) and sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1).
(3) Where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement.
(4) The provisions of sub-section (3) shall apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before the date of agreement for transfer of the asset.]
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Section 43D: 89[Special provision in case of income of public financial institutions, public companies, etc.
- Notwithstanding anything to the contrary contained in any other provision of this Act,—
(a) in the case of a public financial institution or a scheduled bank or a State financial corporation or a State industrial investment corporation, the income by way of interest in relation to such categories of bad or doubtful debts as may be prescribed90 having regard to the guidelines issued by the Reserve Bank of India in relation to such debts;
(b) in the case of a public company, the income by way of interest in relation to such categories of bad or doubtful debts as may be prescribed91 having regard to the guidelines issued by the National Housing Bank in relation to such debts,
shall be chargeable to tax in the previous year in which it is credited by the public financial institution or the scheduled bank or the State financial corporation or the State industrial investment corporation or the public company to its profit and loss account for that year or, as the case may be, in which it is actually received by that institution or bank or corporation or company, whichever is earlier.
Explanation.—For the purposes of this section,—
(a) “National Housing Bank” means the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987);
(b) “public company” means a company,—
(i) which is a public company within the meaning of section 392 of the Companies Act, 1956 (1 of 1956);
(ii) whose main object is carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes; and
(iii) which is registered in accordance with the Housing Finance Companies (NHB) Directions, 1989 given under section 30 and section 31 of the National Housing Bank Act, 1987 (53 of 1987);
(c) “public financial institution” shall have the meaning assigned to it in section 4A93 of the Companies Act, 1956 (1 of 1956);
(d) “scheduled bank” shall have the meaning assigned to it in clause (ii) of the Explanation to clause (viia) of sub-section (1) of section 36;
(e) “State financial corporation” means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951);
(f) “State industrial investment corporation” means a Government company within the meaning of section 61794 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects.]
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Section 44: Insurance business.
- 95 Notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under the head “Interest on securities”, “Income from house property”, “Capital gains” or “Income from other sources”, or in section 199 or in sections 28 to 96[43B], the profits and gains of any business of insurance, including any such business carried on by a mutual insurance company or by a co-operative society, shall be computed in accordance with the rules contained in the First Schedule.
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Section 44A: 97[Special provision for deduction in the case of trade, professional or similar association.
9844A. (1) Notwithstanding anything to the contrary contained in this Act, where the amount received during a previous year by any trade, professional or 99similar association 1[(other than an association or institution referred to in clause (23A) of section 10)] from its members, whether by way of subscription or otherwise (not being remuneration received for rendering any specific services to such members) falls short of the expenditure incurred by such association during that previous year (not being expenditure deductible in computing the income under any other provision of this Act and not being in the nature of capital expenditure) solely for the purposes of protection or advancement of the common interests of its members, the amount so fallen short (hereinafter referred to as deficiency) shall, subject to the provisions of this section, be allowed as a deduction in computing the income of the association assessable for the relevant assessment year under the head “Profits and gains of business or profession” and if there is no income assessable under that head or the deficiency allowable exceeds such income, the whole or the balance of the deficiency, as the case may be, shall be allowed as a deduction in computing the income of the association assessable for the relevant assessment year under any other head.
(2) In computing the income of the association for the relevant assessment year under sub-section (1), effect shall first be given to any other provision of this Act under which any allowance or loss in respect of any earlier assessment year is carried forward and set off against the income for the relevant assessment year.
(3) The amount of deficiency to be allowed as a deduction under this section shall in no case exceed one-half of the total income of the association as computed before making any allowance under this section.
(4) This section applies only to that trade, professional or similar association the income of which or any part thereof is not distributed to its members except as grants to any association or institution affiliated to it.]
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Section 44AA: 2[Maintenance of accounts by certain persons carrying on profession or business.
344AA. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified4 by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the 5[Assessing] Officer to compute his total income in accordance with the provisions of this Act.
(2) Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall,—
(i) if his income from business or profession exceeds 6[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds 7[ten lakh] rupees in any one of the three years immediately preceding the previous year; or
(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed 8[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed 9[ten lakh] rupees, 10[during such previous year; or
(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under 11[section 44AE] 12[or section 44BB or section 44BBB], as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such 13[previous year; or]]
14[(iv) where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year,]
keep and maintain such books of account and other documents as may enable the 15[Assessing] Officer to compute his total income in accordance with the provisions of this Act.
(3) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe16, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1) or sub-section (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.
(4) Without prejudice to the provisions of sub-section (3), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub-section (1) or sub-section (2) shall be retained.]
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Section 44AB: 17[Audit of accounts of certain persons carrying on business or profession.
1844AB. 19Every person,—
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds 20[one crore rupees] in any previous year 21[***]; or
(b) carrying on profession shall, if his gross receipts in profession exceed 22[twenty-five lakh rupees] in any 23[previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under 24[section 44AE ] 25[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any 26[previous year; or]] 27[***]
28[(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]
get his accounts of such previous year 29[***] audited by an accountant before the specified date and 30[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :
31[Provided that this section shall not apply to the person, who derives income of the nature referred to in 32[***] section 44B or 33[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :
Provided further that] in a case where such person is required by or under any other law to get his accounts audited 34[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and 35[furnishes by] that date the report of the audit as required under such other law and a further report 36[by an accountant] in the form prescribed under this section.
- —For the purposes of this section,—
(i) “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
37[(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means 38[the due date for furnishing the return of income under sub-section (1) of section 139].]]
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Section 44AC: Special provision for computing profits and gains from the business of trading in certain goods.
- 39[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 44AD: 40[41Special provision for computing profits and gains of business on presumptive basis.
- (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” .
(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed :
Provided that where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.
(3) The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) The provisions of Chapter XVII-C shall not apply to an eligible assessee in so far as they relate to the eligible business.
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
42[(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;
(ii) a person earning income in the nature of commission or brokerage; or
(iii) a person carrying on any agency business.]
Explanation.—For the purposes of this section,—
(a) “eligible assessee” means,—
(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a 43limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and
(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. – Deductions in respect of certain incomes” in the relevant assessment year;
(b) “eligible business” means,—
(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 44[one crore rupees].]
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Section 44AE: 45[Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages.
- (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages 46[at any time during the previous year] and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head “Profits and gains of business or profession” shall be deemed47 to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2).
48[(2) For the purposes of sub-section (1), the profits and gains from each goods carriage,—
(i) being a heavy goods vehicle, shall be an amount equal to five thousand rupees for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher;
(ii) other than a heavy goods vehicle, shall be an amount equal to four thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher.]
The following sub-section (2) shall be substituted for the existing sub-section (2) of section 44AE by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(2) For the purpose of sub-section (1), the profits and gains from each goods carriage shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from the vehicle, whichever is higher.
(3) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed :
49[Provided that where the assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.]
(4) The written down value of any asset used for the purpose of the business referred to in sub-section (1) shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(5) The provisions of sections 44AA and 44AB shall not apply in so far as they relate to the business referred to in sub-section (1) and in computing the monetary limits under those sections, the gross receipts or, as the case may be, the income from the said business shall be excluded.
50[(6) Nothing contained in the foregoing provisions of this section shall apply, where the assessee claims and produces evidence to prove that the profits and gains from the aforesaid business during the previous year relevant to the assessment year commencing on the 1st day of April, 1997 or any earlier assessment year, are lower than the profits and gains specified in sub-sections (1) and (2), and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee and determine the sum payable by the assessee on the basis of assessment made under sub-section (3) of section 143.]
51[(7) Notwithstanding anything contained in the foregoing provisions of this section, an assessee may claim lower profits and gains than the profits and gains specified in sub-sections (1) and (2), if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB.]
- —For the purposes of this section,—
(a) the expressions “goods carriage” 52 and “heavy goods vehicle” 52 shall have the meanings respectively assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988);
The following clause (a) shall be substituted for the existing clause (a) in Explanation to section 44AE by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(a) the expression “goods carriage” shall have the meaning assigned to it in section 2 of the Motor Vehicles Act, 1988 (59 of 1988);
(b) an assessee, who is in possession of a goods carriage, whether taken on hire purchase or on instalments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriage.]
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Section 44AF: 53[Special provisions for computing profits and gains of retail business.
- (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee engaged in retail trade in any goods or merchandise, a sum equal to five per cent of the total turnover in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” :
Provided that nothing contained in this sub-section shall apply in respect of an assessee whose total turnover exceeds an amount of forty lakh rupees in the previous year.
(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed :
Provided that where the assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.
(3) The written down value of any asset used for the purpose of the business referred to in sub-section (1) shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) The provisions of sections 44AA and 44AB shall not apply in so far as they relate to the business referred to in sub-section (1) and in computing the monetary limits under those sections, the total turnover or, as the case may be, the income from the said business shall be excluded.]
54[(5) Notwithstanding anything contained in the foregoing provisions of this section, an assessee may claim lower profits and gains than the profits and gains specified in sub-section (1), if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB.]
55[(6) Nothing contained in this section shall apply to any assessment year beginning on or after the 1st day of April, 2011.]
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Section 44B: 56[Special provision for computing profits and gains of shipping business in the case of non-residents.
5744B. (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of ships, a sum equal to seven and a half per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” .
(2) The amounts referred to in sub-section (1) shall be the following, namely :—
(i) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India; and
(ii) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India.]
58[Explanation.—For the purposes of this sub-section, the amount referred to in clause (i) or clause (ii) shall include the amount paid or payable or received or deemed to be received, as the case may be, by way of demurrage charges or handling charges or any other amount of similar nature.]
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Section 44BB: 59[Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils.
- (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee 60[, being a non-resident,] engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils, a sum equal to ten per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” :
Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or 61[section 44DA or] section 115A or section 293A apply for the purposes of computing profits or gains or any other income referred to in those sections.
(2) The amounts referred to in sub-section (1) shall be the following, namely :—
(a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India; and
(b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils outside India.
62[(3) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.]
- —For the purposes of this section,—
(i) “plant” includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of the said business;
(ii) “mineral oil” includes petroleum and natural gas.]
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Section 44BBA: 63[Special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents.
- (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of aircraft, a sum equal to five per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” .
(2) The amounts referred to in sub-section (1) shall be the following, namely :—
(a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods from any place in India; and
(b) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods from any place outside India.]
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Section 44BBB: 64[Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects.
6544BBB. 66[(1)] Notwithstanding anything to the contrary contained in sections 28 to 44AA, in the case of an assessee, being a foreign company, engaged in the business of civil construction or the business of erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the Central Government in this behalf 67[***], a sum equal to ten per cent of the amount paid or payable (whether in or out of India) to the said assessee or to any person on his behalf on account of such civil construction, erection, testing or commissioning shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” .]
68[(2) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits and gains than the profits and gains specified in that sub-section, if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.]
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Section 44C: 69[Deduction of head office expenditure in the case of non-residents.70
7144C. Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, no allowance shall be made, in computing the income chargeable under the head “Profits and gains of business or profession”, in respect of so much of the expenditure in the nature of head office expenditure as is in excess of the amount computed as hereunder, namely:—
(a) an amount equal to five per cent of the adjusted total income; or
(b) 72[***]
(c) the amount of so much of the expenditure in the nature of head office expenditure incurred by the assessee as is attributable to the business or profession of the assessee in India73,
whichever is the least :
Provided that in a case where the adjusted total income of the assessee is a loss, the amount under clause (a) shall be computed at the rate of five per cent of the average adjusted total income of the assessee.
- —For the purposes of this section,—
(i) “adjusted total income” means the total income computed in accordance with the provisions of this Act, without giving effect to the allowance referred to in this section or in sub-section (2) of section 32 or the deduction referred to in section 32A or section 33 or section 33A or the first proviso to clause (ix) of sub-section (1) of section 36 or any loss carried forward under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) 74[or sub-section (3)] of section 74 or sub-section (3) of section 74A or the deductions under Chapter VI-A;
(ii) “average adjusted total income” means,—
(a) in a case where the total income of the assessee is assessable for each of the three assessment years immediately preceding the relevant assessment year, one-third of the aggregate amount of the adjusted total income in respect of the previous years relevant to the aforesaid three assessment years;
(b) in a case where the total income of the assessee is assessable only for two of the aforesaid three assessment years, one-half of the aggregate amount of the adjusted total income in respect of the previous years relevant to the aforesaid two assessment years;
(c) in a case where the total income of the assessee is assessable only for one of the aforesaid three assessment years, the amount of the adjusted total income in respect of the previous year relevant to that assessment year;
(iii) 75[***]
(iv) “head office expenditure” means executive and general administration expenditure incurred by the assessee outside India, including expenditure incurred in respect of—
(a) rent, rates, taxes, repairs or insurance of any premises outside India used for the purposes of the business or profession;
(b) salary, wages, annuity, pension, fees, bonus, commission, gratuity, perquisites or profits in lieu of or in addition to salary, whether paid or allowed to any employee or other person employed in, or managing the affairs of, any office outside India;
(c) travelling by any employee or other person employed in, or managing the affairs of, any office outside India; and
(d) such other matters connected with executive and general administration as may be prescribed.]
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Section 44D: 76[Special provisions for computing income by way of royalties, etc., in the case of foreign companies.
- Notwithstanding anything to the contrary contained in sections 28 to 44C, in the case of an assessee, being a foreign company,—
(a) the deductions admissible under the said sections in computing the income by way of royalty or fees for technical services received 77[from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or with the Indian concern] before the 1st day of April, 1976, shall not exceed in the aggregate twenty per cent of the gross amount of such royalty or fees as reduced by so much of the gross amount of such royalty as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process or trade mark or similar property;
(b) no deduction in respect of any expenditure or allowance shall be allowed under any of the said sections in computing the income by way of royalty or fees for technical services received 77[from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or with the Indian concern] after the 31st day of March, 1976 78[but before the 1st day of April, 2003];
(c) 79[***]
(d) 80[***]
- —For the purposes of this section,—
(a) “fees for technical services” shall have the same meaning as in 81[Explanation 2] to clause (vii) of sub-section (1) of section 9;
(b) “foreign company” shall have the same meaning as in section 80B;
(c) “royalty” shall have the same meaning as in 82[Explanation 2] to clause (vi) of sub-section (1) of section 9;
(d) royalty received 83[from Government or an Indian concern in pursuance of an agreement made by a foreign company with Government or with the Indian concern] after the 31st day of March, 1976, shall be deemed to have been received in pursuance of an agreement made before the 1st day of April, 1976, if such agreement is deemed, for the purposes of the proviso to clause (vi) of sub-section (1) of section 9, to have been made before the 1st day of April, 1976.]
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Section 44DA: 84[Special provision for computing income by way of royalties, etc., in case of non-residents.
- (1) The income by way of royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by a non-resident (not being a company) or a foreign company with Government or the Indian concern after the 31st day of March, 2003, where such non-resident (not being a company) or a foreign company carries on business in India through a permanent establishment situated therein, or performs professional services from a fixed place of profession situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed place of profession, as the case may be, shall be computed under the head “Profits and gains of business or profession” in accordance with the provisions of this Act :
Provided that no deduction shall be allowed,—
(i) in respect of any expenditure or allowance which is not wholly and exclusively incurred for the business of such permanent establishment or fixed place of profession in India; or
(ii) in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to its head office or to any of its other offices :
85[Provided further that the provisions of section 44BB shall not apply in respect of the income referred to in this section.]
(2) Every non-resident (not being a company) or a foreign company shall keep and maintain books of account and other documents in accordance with the provisions contained in section 44AA and get his accounts audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and furnish along with the return of income, the report of such audit in the prescribed form86 duly signed and verified by such accountant.
Explanation.—For the purposes of this section,—
(a) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;
(b) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;
(c) “permanent establishment” shall have the same meaning as in clause (iiia) of section 92F.]
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Section 44DB: 87[Special provision for computing deductions in the case of business reorganization of co-operative banks.
- (1) The deduction under section 32, section 35D, section 35DD or section 35DDA shall, in a case where business reorganisation of a co-operative bank has taken place during the financial year, be allowed in accordance with the provisions of this section.
(2) The amount of deduction allowable to the predecessor co-operative bank under section 32, section 35D, section 35DD or section 35DDA shall be determined in accordance with the formula—
where A = the amount of deduction allowable to the predecessor co-operative bank if the business reorganisation had not taken place;
B = the number of days comprised in the period beginning with the 1st day of the financial year and ending on the day immediately preceding the date of business reorganisation; and
C = the total number of days in the financial year in which the business reorganisation has taken place.
(3) The amount of deduction allowable to the successor co-operative bank under section 32, section 35D, section 35DD or section 35DDA shall be determined in accordance with the formula—
where A = the amount of deduction allowable to the predecessor co-operative bank if the business reorganisation had not taken place;
B = the number of days comprised in the period beginning with the date of business reorganisation and ending on the last day of the financial year; and
C = the total number of days in the financial year in which the business reorganisation has taken place.
(4) The provisions of section 35D, section 35DD or section 35DDA shall, in a case where an undertaking of the predecessor co-operative bank entitled to the deduction under the said section is transferred before the expiry of the period specified therein to a successor co-operative bank on account of business reorganisation, apply to the successor co-operative bank in the financial years subsequent to the year of business reorganisation as they would have applied to the predecessor co-operative bank, as if the business reorganisation had not taken place.
(5) For the purposes of this section,—
(a) “amalgamated co-operative bank” means—
(i) a co-operative bank with which one or more amalgamating co-operative banks merge; or
(ii) a co-operative bank formed as a result of merger of two or more amalgamating co-operative banks;
(b) “amalgamating co-operative bank” means—
(i) a co-operative bank which merges with another co-operative bank; or
(ii) every co-operative bank merging to form a new co-operative bank;
(c) “amalgamation” means the merger of an amalgamating co-operative bank or banks with an amalgamated co-operative bank, in such manner that—
(i) all the assets and liabilities of the amalgamating co-operative bank or banks immediately before the merger (other than the assets transferred, by sale or distribution on winding up, to the amalgamated co-operative bank) become the assets and liabilities of the amalgamated co-operative bank;
(ii) the members holding seventy-five per cent or more voting rights in the amalgamating co-operative bank become members of the amalgamated co-operative bank; and
(iii) the shareholders holding seventy-five per cent or more in value of the shares in the amalgamating co-operative bank (other than the shares held by the amalgamated co-operative bank or its nominee or its subsidiary, immediately before the merger) become shareholders of the amalgamated co-operative bank;
(d) “business reorganisation” means the reorganisation of business involving the amalgamation or demerger of a co-operative bank;
(e) “co-operative bank” shall have the meaning assigned to it in clause (cci) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)88;
(f) “demerger” means the transfer by a demerged co-operative bank of one or more of its undertakings to any resulting co-operative bank, in such manner that—
(i) all the assets and liabilities of the undertaking or undertakings immediately before the transfer become the assets and liabilities of the resulting co-operative bank;
(ii) the assets and the liabilities are transferred to the resulting co-operative bank at values (other than change in the value of assets consequent to their revaluation) appearing in its books of account immediately before the transfer;
(iii) the resulting co-operative bank issues, in consideration of the transfer, its membership to the members of the demerged co-operative bank on a proportionate basis;
(iv) the shareholders holding seventy-five per cent or more in value of the shares in the demerged co-operative bank (other than shares already held by the resulting bank or its nominee or its subsidiary immediately before the transfer), become shareholders of the resulting co-operative bank, otherwise than as a result of the acquisition of the assets of the demerged co-operative bank or any undertaking thereof by the resulting co-operative bank;
(v) the transfer of the undertaking is on a going concern basis; and
(vi) the transfer is in accordance with the conditions specified by the Central Government, by notification in the Official Gazette, having regard to the necessity to ensure that the transfer is for genuine business purposes;
(g) “demerged co-operative bank” means the co-operative bank whose undertaking is transferred, pursuant to a demerger, to a resulting bank;
(h) “predecessor co-operative bank” means the amalgamating co-operative bank or the demerged co-operative bank, as the case may be;
(i) “successor co-operative bank” means the amalgamated co-operative bank or the resulting bank, as the case may be;
(j) “resulting co-operative bank” means—
(i) one or more co-operative banks to which the undertaking of the demerged co-operative bank is transferred in a demerger; or
(ii) any co-operative bank formed as a result of demerger.]
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Section 45: Capital gains
Capital gains.
- 89 90[(1)] Any profits or gains arising from the transfer91 of a capital asset91 effected91 in the previous year shall, save as otherwise provided in sections 92[***] 93[54, 54B, 94[***] 95[96[54D, 97[54E, 98[54EA, 54EB,] 54F 99[, 54G and 54H]]]]], be chargeable to income-tax under the head “Capital gains”, and shall be deemed to be the income of the previous year in which the transfer took place.
1[(1A) Notwithstanding anything contained in sub-section (1), where any person receives at any time during any previous year any money or other assets under an insurance from an insurer on account of damage to, or destruction of, any capital asset, as a result of—
(i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; or
(ii) riot or civil disturbance; or
(iii) accidental fire or explosion; or
(iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war),
then, any profits or gains arising from receipt of such money or other assets shall be chargeable to income-tax under the head “Capital gains” and shall be deemed to be the income of such person of the previous year in which such money or other asset was received and for the purposes of section 48, value of any money or the fair market value of other assets on the date of such receipt shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of such capital asset.
Explanation.—For the purposes of this sub-section, the expression “insurer” shall have the meaning assigned to it in clause (9) of section 22 of the Insurance Act, 1938 (4 of 1938).]
3[(2) Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset.]
4[(2A) 5Where any person has had at any time during previous year any beneficial interest in any securities, then, any profits or gains arising from transfer made by the depository or participant of such beneficial interest in respect of securities shall be chargeable to income-tax as the income of the beneficial owner of the previous year in which such transfer took place and shall not be regarded as income of the depository who is deemed to be the registered owner of securities by virtue of sub-section (1) of section 10 of the Depositories Act, 1996, and for the purposes of—
(i) section 48; and
(ii) proviso to clause (42A) of section 2,
the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method.
Explanation.—For the purposes of this sub-section, the expressions “beneficial owner” 6, “depository” 6 and “security” 6 shall have the meanings respectively assigned to them in clauses (a), (e) and (l) of sub-section (1) of section 2 of the Depositories Act, 1996.]
7[(3) The profits or gains arising from the transfer of a capital asset by a person to a firm or other association of persons or body of individuals (not being a company or a co-operative society) in which he is or becomes a partner or member, by way of capital contribution or otherwise, shall be chargeable to tax as his income of the previous year in which such transfer takes place and, for the purposes of section 48, the amount recorded in the books of account of the firm, association or body as the value of the capital asset shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset.
(4) The profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or other association of persons or body of individuals (not being a company or a co-operative society) or otherwise8, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration received or accruing as a result of the transfer.]
9[(5) Notwithstanding anything contained in sub-section (1), where the capital gain arises from the transfer of a capital asset, being a transfer by way of compulsory acquisition under any law, or a transfer the consideration for which was determined or approved by the Central Government or the Reserve Bank of India, and the compensation or the consideration for such transfer is enhanced or further enhanced by any court, Tribunal or other authority, the capital gain shall be dealt with in the following manner, namely :—
(a) the capital gain computed with reference to the compensation awarded in the first instance10 or, as the case may be, the consideration determined or approved in the first instance by the Central Government or the Reserve Bank of India shall be chargeable as 11[income under the head “Capital gains” of the previous year in which such compensation or part thereof, or such consideration or part thereof, was first received]; and
(b) the amount by which the compensation or consideration is enhanced or further enhanced by the court, Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains” of the previous year in which such amount is received by the assessee;
The following proviso shall be inserted after clause (b) of sub-section (5) of section 45 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided that any amount of compensation received in pursuance of an interim order of a court, Tribunal or other authority shall be deemed to be income chargeable under the head “Capital gains” of the previous year in which the final order of such court, Tribunal or other authority is made;
12[(c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset is computed by taking the compensation or consideration referred to in clause (a) or, as the case may be, enhanced compensation or consideration referred to in clause (b), and subsequently such compensation or consideration is reduced by any court, Tribunal or other authority, such assessed capital gain of that year shall be recomputed by taking the compensation or consi-deration as so reduced by such court, Tribunal or other authority to be the full value of the consideration.]
Explanation.—For the purposes of this sub-section,—
(i) in relation to the amount referred to in clause (b), the cost of acquisition and the cost of improvement shall be taken to be nil;
(ii) the provisions of this sub-section shall apply also in a case where the transfer took place prior to the 1st day of April, 1988;
(iii) where by reason of the death of the person who made the transfer, or for any other reason, the enhanced compensation or consideration is received by any other person, the amount referred to in clause (b) shall be deemed to be the income, chargeable to tax under the head “Capital gains”, of such other person.]
13[(6) Notwithstanding anything contained in sub-section (1), the difference between the repurchase price of the units referred to in sub-section (2) of section 80CCB and the capital value of such units shall be deemed to be the capital gains arising to the assessee in the previous year in which such repurchase takes place or the plan referred to in that section is terminated and shall be taxed accordingly.
- —For the purposes of this sub-section, “capital value of such units” means any amount invested by the assessee in the units referred to in sub-section (2) of section 80CCB.]
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Section 46: Capital gains on distribution of assets by companies in liquidation.
- 14 (1) Notwithstanding anything contained in section 45, where the assets of a company are distributed to its shareholders on its liquidation15, such distribution shall not be regarded as a transfer by the company for the purposes of section 45.
(2) Where a shareholder on the liquidation of a company receives any money or other assets15 from the company, he shall be chargeable to income-tax under the head “Capital gains”, in respect of the money so received or the market value of the other assets on the date of distribution, as reduced by the amount assessed as dividend within the meaning of sub-clause (c) of clause (22) of section 2 and the sum so arrived at shall be deemed to be the full value of the consideration for the purposes of section 48.
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Section 46A: 16[Capital gains on purchase by company of its own shares or other specified securities.
- Where a shareholder or a holder of other specified securities receives any consideration from any company for purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 48, the difference between the cost of acquisition and the value of consideration received by the shareholder or the holder of other specified securities, as the case may be, shall be deemed to be the capital gains arising to such shareholder or the holder of other specified securities, as the case may be, in the year in which such shares or other specified securities were purchased by the company.
Explanation.—For the purposes of this section, “specified securities” shall have the meaning assigned to it in Explanation to section 77A17 of the Companies Act, 1956 (1 of 1956).]
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Section 47: Transactions not regarded as transfer18.
- 19 Nothing contained in section 45 shall apply to the following transfers :—
(i) any distribution of capital assets20 on the total or partial partition of a Hindu undivided family;
(ii) 21[***]
(iii) any transfer of a capital asset under a gift22 or will or an irrevocable trust :
23[Provided that this clause shall not apply to transfer under a gift or an irrevocable trust of a capital asset being shares, debentures or warrants allotted by a company directly or indirectly to its employees under 24[any Employees— Stock Option Plan or Scheme of the company offered to such employees in accordance with the guidelines issued by the Central Government in this behalf];]
(iv) any transfer of a capital asset by a company to its subsidiary company, if—
(a) the parent company or its nominees hold the whole of the share capital of the subsidiary company, and
(b) the subsidiary company is an Indian company;
25[(v) any transfer of a capital asset by a subsidiary company to the holding company, if—
(a) the whole of the share capital of the subsidiary company is held by the holding company, and
(b) the holding company is an Indian company :]
26[Provided that nothing contained in clause (iv) or clause (v) shall apply to the transfer of a capital asset made after the 29th day of February, 1988, as stock-in-trade;]
27[(vi) any transfer, in a scheme of amalgamation28, of a capital asset by the amalgamating company to the amalgamated company if the amalgamated company is an Indian company;]
29[(via) any transfer, in a scheme of amalgamation28, of a capital asset being a share or shares held in an Indian company, by the amalgamating foreign company to the amalgamated foreign company, if—
(a) at least twenty-five per cent of the shareholders of the amalga-mating foreign company continue to remain shareholders of the amalgamated foreign company, and
(b) such transfer does not attract tax on capital gains in the country, in which the amalgamating company is incorporated;]
30[(viaa) any transfer, in a scheme of amalgamation of a banking company with a banking institution sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), of a capital asset by the banking company to the banking institution.
Explanation.—For the purposes of this clause,—
(i) “banking company” shall have the same meaning assigned to it in clause (c) of section 531 of the Banking Regulation Act, 1949 (10 of 1949);
(ii) “banking institution” shall have the same meaning assigned to it in sub-section (15) of section 4531 of the Banking Regulation Act, 1949 (10 of 1949);]
32[(vib) any transfer, in a demerger, of a capital asset by the demerged company to the resulting company, if the resulting company is an Indian company;
(vic) any transfer in a demerger, of a capital asset, being a share or shares held in an Indian company, by the demerged foreign company to the resulting foreign company, if—
(a) 33[the shareholders holding not less than three-fourths in value of the shares] of the demerged foreign company continue to remain shareholders of the resulting foreign company; and
(b) such transfer does not attract tax on capital gains in the country, in which the demerged foreign company is incorporated :
Provided that the provisions of sections 391 to 39434 of the Companies Act, 1956 (1 of 1956) shall not apply in case of demergers referred to in this clause;
35[(vica) any transfer in a business reorganisation, of a capital asset by the predecessor co-operative bank to the successor co-operative bank;
(vicb) any transfer by a shareholder, in a business reorganisation, of a capital asset being a share or shares held by him in the predecessor co-operative bank if the transfer is made in consideration of the allotment to him of any share or shares in the successor co-operative bank.
Explanation.—For the purposes of clauses (vica) and (vicb), the expressions “business reorganisation”, “predecessor co-operative bank” and “successor co-operative bank” shall have the meanings respectively assigned to them in section 44DB;]
(vid) any transfer or issue of shares by the resulting company, in a scheme of demerger to the shareholders of the demerged company if the transfer or issue is made in consideration of demerger of the undertaking;]
(vii) any transfer by a shareholder, in a scheme of amalgamation36, of a capital asset being a share or shares held by him in the amalgamating company, if—
(a) the transfer is made in consideration of the allotment to him of any share or shares in the 37[amalgamated company except where the shareholder itself is the amalgamated company, and]
(b) the amalgamated company is an Indian company;
38[(viia) any transfer of a capital asset, being bonds or 39[Global Depository Receipts] referred to in sub-section (1) of section 115AC, made outside India by a non-resident to another non-resident;]
The following clause (viib) and Explanation thereto shall be inserted after clause (viia) of section 47 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(viib) any transfer of a capital asset, being a Government Security carrying a periodic payment of interest, made outside India through an intermediary dealing in settlement of securities, by a non-resident to another non-resident.
Explanation.—For the purposes of this clause, “Government Security” shall have the meaning assigned to it in clause (b) of section 239a of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
40[(viii) any transfer of agricultural land in India effected before the 1st day of March, 1970;]
41[(ix) any transfer of a capital asset, being any work of art, archaeological, scientific or art collection, book, manuscript, drawing, painting, photograph or print, to the Government or a University or the National Museum, National Art Gallery, National Archives or any such other public museum or institution as may be notified42 by the Central Government in the Official Gazette to be of national importance or to be of renown throughout any State or States.
- —For the purposes of this clause, “University” means a University established or incorporated by or under a Central, State or Provincial Act and includes an institution declared under section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a University for the purposes of that Act;]
43[(x) any transfer by way of conversion of 44[bonds or] debentures, debenture-stock or deposit certificates in any form, of a company into shares or debentures of that company;]
45[(xa) any transfer by way of conversion of bonds referred to in clause (a) of sub-section (1) of section 115AC into shares or debentures of any company;]
46[(xi) any transfer made on or before the 31st day of December, 47[1998] by a person (not being a company) of a capital asset being membership of a recognised stock exchange to a company in exchange of shares allotted by that company to the transferor.
Explanation.—For the purposes of this clause, the expression “membership of a recognised stock exchange” means the membership of a stock exchange in India which is recognised under the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(xii) any transfer of a capital asset, being land of a sick industrial company, made under a scheme prepared and sanctioned under section 1848 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) where such sick industrial company is being managed by its workers— co-operative :
Provided that such transfer is made during the period commencing from the previous year in which the said company has become a sick industrial company under sub-section (1) of section 1749 of that Act and ending with the previous year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses.
Explanation.—For the purposes of this clause, “net worth” shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 349 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986);]
50[(xiii) 51[any transfer of a capital asset or intangible asset by a firm to a company as a result of succession of the firm by a company in the business carried on by the firm, or any transfer of a capital asset to a company in the course of 52[demutualisation or] corporatisation of a recognised stock exchange in India as a result of which an association of persons or body of individuals is succeeded by such company :]
Provided that—
(a) all the assets and liabilities of the firm 53[or of the association of persons or body of individuals] relating to the business immediately before the succession become the assets and liabilities of the company;
(b) all the partners of the firm immediately before the succession become the shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of the succession;
(c) the partners of the firm do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company; and
(d) the aggregate of the shareholding in the company of the partners of the firm is not less than fifty per cent of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession;
54[(e) the 55[demutualisation or] corporatisation of a recognised stock exchange in India is carried out in accordance with a scheme for 55[demutualisation or] corporatisation which is approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
55[(xiiia) any transfer of a capital asset being a membership right held by a member of a recognised stock exchange in India for acquisition of shares and trading or clearing rights acquired by such member in that recognised stock exchange in accordance with a scheme for demutualisation or corporatisation which is approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
56[(xiiib) any transfer of a capital asset or intangible asset by a private company or unlisted public company (hereafter in this clause referred to as the company) to a limited liability partnership or any transfer of a share or shares held in the company by a shareholder as a result of conversion of the company into a limited liability partnership in accordance with the provisions of section 56 or section 57 of the Limited Liability Partnership Act, 2008 (6 of 2009)57:
Provided that—
(a) all the assets and liabilities of the company immediately before the conversion become the assets and liabilities of the limited liability partnership;
(b) all the shareholders of the company immediately before the conversion become the partners of the limited liability partnership and their capital contribution and profit sharing ratio in the limited liability partnership are in the same proportion as their shareholding in the company on the date of conversion;
(c) the shareholders of the company do not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of share in profit and capital contribution in the limited liability partnership;
(d) the aggregate of the profit sharing ratio of the shareholders of the company in the limited liability partnership shall not be less than fifty per cent at any time during the period of five years from the date of conversion;
(e) the total sales, turnover or gross receipts in the business of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed sixty lakh rupees; and
(f) no amount is paid, either directly or indirectly, to any partner out of balance of accumulated profit standing in the accounts of the company on the date of conversion for a period of three years from the date of conversion.
Explanation.—For the purposes of this clause, the expressions “private company” and “unlisted public company” shall have the meanings58 respectively assigned to them in the Limited Liability Partnership Act, 2008 (6 of 2009);]
(xiv) where a sole proprietary concern is succeeded by a company in the business carried on by it as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or intangible asset to the company :
Provided that—
(a) all the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession become the assets and liabilities of the company;
(b) the shareholding of the sole proprietor in the company is not less than fifty per cent of the total voting power in the company and his shareholding continues to remain as such for a period of five years from the date of the succession; and
(c) the sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other than by way of allotment of shares in the company;
(xv) any transfer in a scheme for lending of any securities under an agreement or arrangement, which the assessee has entered into with the borrower of such securities and which is subject to the guidelines issued by the Securities and Exchange Board of India, established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) 59[or the Reserve Bank of India constituted under sub-section (1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934)], in this regard;]
60[(xvi) any transfer of a capital asset in a transaction of reverse mortgage under a scheme made and notified by the Central Government.]
The following clause (xvii) and Explanation thereto shall be inserted after clause (xvi) of section 47 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(xvii) any transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust to the transferor.
Explanation.—For the purposes of this clause, the expression “special purpose vehicle” shall have the meaning assigned to it in the Explanation to clause (23FC) of section 10.
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Section 47A: 61[Withdrawal of exemption in certain cases.
- 62[(1)] Where at any time before the expiry of a period of eight years from the date of the transfer of a capital asset referred to in clause (iv) or, as the case may be, clause (v) of section 47,—
(i) such capital asset is converted by the transferee company into, or is treated by it as, stock-in-trade of its business; or
(ii) the parent company or its nominees or, as the case may be, the holding company ceases or cease to hold the whole of the share capital of the subsidiary company,
the amount of profits or gains arising from the transfer of such capital asset not charged under section 45 by virtue of the provisions contained in clause (iv) or, as the case may be, clause (v) of section 47 shall, notwithstanding anything contained in the said clauses, be deemed to be income chargeable under the head “Capital gains” of the previous year in which such transfer took place.]
62[(2) Where at any time, before the expiry of a period of three years from the date of the transfer of a capital asset referred to in clause (xi) of section 47, any of the shares allotted to the transferor in exchange of a membership in a recognised stock exchange are transferred, the amount of profits and gains not charged under section 45 by virtue of the provisions contained in clause (xi) of section 47 shall, notwithstanding anything contained in the said clause, be deemed to be the income chargeable under the head “Capital gains” of the previous year in which such shares are transferred.]
63[(3) Where any of the conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) of section 47 are not complied with, the amount of profits or gains arising from the transfer of such capital asset or intangible asset not charged under section 45 by virtue of conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) of section 47 shall be deemed to be the profits and gains chargeable to tax of the successor company for the previous year in which the requirements of the proviso to clause (xiii) or the proviso to clause (xiv), as the case may be, are not complied with.]
64[(4) Where any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the amount of profits or gains arising from the transfer of such capital asset or intangible assets or share or shares not charged under section 45 by virtue of conditions laid down in the said proviso shall be deemed to be the profits and gains chargeable to tax of the successor limited liability partnership or the shareholder of the predecessor company, as the case may be, for the previous year in which the requirements of the said proviso are not complied with.]
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Section 48: 65[Mode of computation.
- 66 The income chargeable under the head “Capital gains” shall be computed, by deducting from the full value of the consideration received or accruing67 as a result of the transfer of the capital asset the following amounts, namely :—
(i) expenditure incurred wholly and exclusively in connection with such transfer68;
(ii) the cost of acquisition of the asset and the cost of any improvement6 thereto:
69Provided that in the case of an assessee, who is a non-resident, capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer of the capital asset into the same foreign currency as was initially utilised in the purchase of the shares or debentures, and the capital gains so computed in such foreign currency shall be reconverted into Indian currency, so, however, that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing or arising from every reinvestment thereafter in, and sale of, shares in, or debentures of, an Indian company :
Provided further that where long-term capital gain arises from the transfer of a long-term capital asset, other than capital gain arising to a non-resident from the transfer of shares in, or debentures of, an Indian company referred to in the first proviso, the provisions of clause (ii) shall have effect as if for the words “cost of acquisition” and “cost of any improvement”, the words “indexed cost of acquisition” and “indexed cost of any improvement” had respectively been substituted:
70[Provided also that nothing contained in the second proviso shall apply to the long-term capital gain arising from the transfer of a long-term capital asset being bond or debenture other than capital indexed bonds issued by the Government :]
71[Provided also that where shares, debentures or warrants referred to in the proviso to clause (iii) of section 47 are transferred under a gift or an irrevocable trust, the market value on the date of such transfer shall be deemed to be the full value of consideration received or accruing as a result of transfer for the purposes of this section :]
72[Provided also that no deduction shall be allowed in computing the income chargeable under the head “Capital gains” in respect of any sum paid on account of securities transaction tax under Chapter VII of the Finance (No. 2) Act, 2004.]
Explanation.—For the purposes of this section,—
(i) “foreign currency” 73 and “Indian currency” 73 shall have the meanings respectively assigned to them in section 2 of 74[the Foreign Exchange Management Act, 1999 (42 of 1999)];
(ii) the conversion of Indian currency into foreign currency and the reconversion of foreign currency into Indian currency shall be at the rate of exchange prescribed in this behalf;
(iii) “indexed cost of acquisition” 75 means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee75 or for the year beginning on the 1st day of April, 1981, whichever is later;
(iv) “indexed cost of any improvement” means an amount which bears to the cost of improvement the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the year in which the improvement to the asset took place;
76[(v) “Cost Inflation Index”, in relation to a previous year, means such Index as the Central Government may, having regard to seventy-five per cent of average rise in the 76a[Consumer Price Index for urban non-manual employees] for the immediately preceding previous year to such previous year, by notification77 in the Official Gazette, specify, in this behalf.]]
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Section 49: Cost with reference to certain modes of acquisition.
- 78 79[(1)] Where the capital asset became the property of the assessee—
(i) on any distribution of assets on the total or partial partition of a Hindu undivided family;
(ii) under a gift or will;
(iii) (a) by succession, inheritance or devolution80, or
81[(b) on any distribution of assets on the dissolution of a firm, body of individuals, or other association of persons, where such dissolution had taken place at any time before the 1st day of April, 1987, or]
(c) on any distribution of assets on the liquidation of a company, or
(d) under a transfer to a revocable or an irrevocable trust, or
(e) under any such transfer as is referred to in clause (iv) 82[or clause (v)] 83[or clause (vi)] 84[or clause (via)] 85[or clause (viaa)] 86[or clause (vica) or 87[clause (vicb)] or 88[clause (xiii) or clause (xiiib) or clause (xiv) of section 47]];
89[(iv) such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of section 64 at any time after the 31st day of December, 1969,]
the cost of acquisition of the asset89a shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be.
90[Explanation.—In this 91[sub-section] the expression “previous owner of the property” in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) 92[or clause (iv)] of this 93[sub-section].]
94[(2) Where the capital asset being a share or shares in an amalgamated company which is an Indian company became the property of the assessee in consideration of a transfer referred to in clause (vii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the amalgamating company.]
95[(2A) Where the capital asset, being a share or debenture of a company, became the property of the assessee in consideration of a transfer referred to in clause (x) or clause (xa) of section 47, the cost of acquisition of the asset to the assessee shall be deemed to be that part of the cost of debenture, debenture-stock, bond or deposit certificate in relation to which such asset is acquired by the assessee.]
96[(2AA) Where the capital gain arises from the transfer of specified security or sweat equity shares referred to in sub-clause (vi) of clause (2) of section 17, the cost of acquisition of such security or shares shall be the fair market value which has been taken into account for the purposes of the said sub-clause.]
97[(2AAA) Where the capital asset, being rights of a partner referred to in section 42 of the Limited Liability Partnership Act, 2008 (6 of 2009), became the property of the assessee on conversion as referred to in clause (xiiib) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the company immediately before its conversion.]
98[(2AB) Where the capital gain arises from the transfer of specified security or sweat equity shares, the cost of acquisition of such security or shares shall be the fair market value which has been taken into account while computing the value of fringe benefits under clause (ba) of sub-section (1) of section 115WC.]
The following sub-section (2AC) shall be inserted after sub-section (2AB) of section 49 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
(2AC) Where the capital asset, being a unit of a business trust, became the property of the assessee in consideration of a transfer as referred to in clause (xvii) of section 47, the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share referred to in the said clause.
99[(2B) 1[***]
(2C) The cost of acquisition of the shares in the resulting company shall be the amount which bears to the cost of acquisition of shares held by the assessee in the demerged company the same proportion as the net book value of the assets transferred in a demerger bears to the net worth of the demerged company immediately before such demerger.
(2D) The cost of acquisition of the original shares held by the shareholder in the demerged company shall be deemed to have been reduced by the amount as so arrived at under sub-section (2C).]
2[(2E) The provisions of sub-section (2), sub-section (2C) and sub-section (2D) shall, as far as may be, also apply in relation to business reorganisation of a co-operative bank as referred to in section 44DB.]
Explanation.—For the purposes of this section, “net worth” shall mean the aggregate of the paid up share capital and general reserves as appearing in the books of account of the demerged company immediately before the demerger.]
3[(3) Notwithstanding anything contained in sub-section (1), where the capital gain arising from the transfer of a capital asset referred to in clause (iv) or, as the case may be, clause (v) of section 47 is deemed to be income chargeable under the head “Capital gains” by virtue of the provisions contained in section 47A, the cost of acquisition of such asset to the transferee-company shall be the cost for which such asset was acquired by it.]
4[(4) Where the capital gain arises from the transfer of a property, the value of which has been subject to income-tax under clause (vii) 5[or clause (viia)] of sub-section (2) of section 56, the cost of acquisition of such property shall be deemed to be the value which has been taken into account for the purposes of the said clause (vii) 5[or clause (viia)].]
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Section 50: 6[Special provision for computation of capital gains in case of depreciable assets.
- 7 Notwithstanding anything contained in clause (42A) of section 2, where the capital asset is an asset forming part of a block of assets8 in respect of which depreciation has been allowed under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), the provisions of sections 48 and 49 shall be subject to the following modifications :—
(1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of the assets during the previous year, exceeds the aggregate of the following amounts, namely :—
(i) expenditure incurred wholly and exclusively in connection with such transfer or transfers;
(ii) the written down value of the block of assets at the beginning of the previous year; and
(iii) the actual cost of any asset falling within the block of assets acquired during the previous year,
such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets;
(2) where any block of assets ceases to exist as such, for the reason that all the assets in that block are transferred during the previous year, the cost of acquisition of the block of assets shall be the written down value of the block of assets at the beginning of the previous year, as increased by the actual cost of any asset falling within that block of assets, acquired by the assessee during the previous year and the income received or accruing as a result of such transfer or transfers shall be deemed to be the capital gains arising from the transfer of short-term capital assets.]
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Section 50A: 9[Special provision for cost of acquisition in case of depreciable asset.
- Where the capital asset is an asset in respect of which a deduction on account of depreciation under clause (i) of sub-section (1) of section 32 has been obtained by the assessee in any previous year, the provisions of sections 48 and 49 shall apply subject to the modification that the written down value, as defined in clause (6) of section 43, of the asset, as adjusted, shall be taken as the cost of acquisition of the asset.]
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Section 50B: 10[Special provision for computation of capital gains in case of slump sale.
- (1) Any profits or gains arising from the slump sale effected in the previous year shall be chargeable to income-tax as capital gains arising from the transfer of long-term capital assets and shall be deemed to be the income of the previous year in which the transfer took place :
Provided that any profits or gains arising from the transfer under the slump sale of any capital asset being one or more undertakings owned and held by an assessee for not more than thirty-six months immediately preceding the date of its transfer shall be deemed to be the capital gains arising from the transfer of short-term capital assets.
(2) In relation to capital assets being an undertaking or division transferred by way of such sale, the “net worth” of the undertaking or the division, as the case may be, shall be deemed to be the cost of acquisition and the cost of improvement for the purposes of sections 48 and 49 and no regard shall be given to the provisions contained in the second proviso to section 48.
(3) Every assessee, in the case of slump sale, shall furnish in the prescribed form11 along with the return of income, a report of an accountant as defined in the Explanation below sub-section (2) of section 288, indicating the computation of the net worth of the undertaking or division, as the case may be, and certifying that the net worth of the undertaking or division, as the case may be, has been correctly arrived at in accordance with the provisions of this section.
12[Explanation 1.—For the purposes of this section, “net worth” shall be the aggregate value of total assets of the undertaking or division as reduced by the value of liabilities of such undertaking or division as appearing in its books of account :
Provided that any change in the value of assets on account of revaluation of assets shall be ignored for the purposes of computing the net worth.
Explanation 2.—For computing the net worth, the aggregate value of total assets shall be,—
(a) in the case of depreciable assets, the written down value of the block of assets determined in accordance with the provisions contained in sub-item (c) of item (i) of sub-clause (c) of clause (6) of section 43; 13[***]
14[(b) in the case of capital assets in respect of which the whole of the expenditure has been allowed or is allowable as a deduction under section 35AD, nil; and
(c) in the case of other assets, the book value of such assets.]]]
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Section 50C: 15[Special provision for full value of consideration in certain cases.
- (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed 16[or assessable] by any authority of a State Government (hereafter in this section referred to as the “stamp valuation authority” ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed 16[or assessable] shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer.
(2) Without prejudice to the provisions of sub-section (1), where—
(a) the assessee claims before any Assessing Officer that the value adopted or assessed 16[or assessable] by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer;
(b) the value so adopted or assessed 16[or assessable] by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court,
the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modi-fications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act.
17[Explanation 1].—For the purposes of this section, “Valuation Officer” shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).
18[Explanation 2.—For the purposes of this section, the expression “assessable” means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty.]
(3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed 18[or assessable] by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed 18[or assessable] by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.]
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Section 50D: 19[Fair market value deemed to be full value of consideration in certain cases.
- Where the consideration received or accruing as a result of the transfer of a capital asset by an assessee is not ascertainable or cannot be determined, then, for the purpose of computing income chargeable to tax as capital gains, the fair market value of the said asset on the date of transfer shall be deemed to be the full value of the consideration received or accruing as a result of such transfer.]
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Section 51: Advance money received.
- Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money20 received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.
The following proviso shall be inserted in section 51 by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided that where any sum of money, received as an advance or otherwise in the course of negotiations for transfer of a capital asset, has been included in the total income of the assessee for any previous year in accordance with the provisions of clause (ix) of sub-section (2) of section 56, then, such sum shall not be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition.
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Section 52: Consideration for transfer in cases of understatement.
- 21[Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.]
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Section 53: Exemption of capital gains from a residential house.
- 22[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 54: Profit on sale of property used for residence.
- 23 24[(1)] 25[26[Subject to the provisions of sub-section (2), where, in the case of an assessee27 being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset 28[***], being buildings or 29lands appurtenant thereto, and being a residential house29, the income of which is chargeable under the head “Income from house property” (hereafter in this section referred to as the original asset), and the assessee has within a period of 30[one year before or two years after the date on which the transfer took place purchased31], or has within a period of three years after that date 31a[constructed, a residential house], then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain 32[is greater than the cost of 33[the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or
(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.
34[***]
35[(2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme36 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset :
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,—
(i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.
Explanation.—37[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 54B: 38[Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases.
3954B. 40[(1)] 41[Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by 42[the assessee being an individual or his parent, or a Hindu undivided family] for agricultural purposes 43[(hereinafter referred to as the original asset)], and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or
(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain.]
44[(2) The amount of the capital gain which is not utilised by the assessee for the purchase of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme45 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset :
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in sub-section (1), then,—
(i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.
Explanation.—46[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]]
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Section 54C: Capital gain on transfer of jewellery held for personal use not to be charged in certain cases.
- [Omitted by the Finance Act, 1976, w.e.f. 1-4-1976. Original section was inserted by the Finance Act, 1972, w.e.f. 1-4-1973.]
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Section 54D: 47[Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases.
4854D. 49[(1)] 50[Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking51 belonging to the assessee which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee for the purposes of the business of the said undertaking 52[(hereafter in this section referred to as the original asset)], and the assessee has within a period of three years after that date purchased any other land or building or any right in any other land or building or constructed any other building for the purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking, then, instead of the capital gain being charged to income-tax as the income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain is greater than the cost of the land, building or right so purchased or the building so constructed (such land, building or right being hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or
(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.]
53[(2) The amount of the capital gain which is not utilised by the assessee for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme54 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset:
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,—
(i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.
Explanation.—55[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 54E: 56[Capital gain on transfer of capital assets not to be charged in certain cases.
5754E. (1) Where the capital gain arises from the transfer of a 58[long-term capital asset] 59[before the 1st day of April, 1992], (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, within a period of six months after the date of such transfer, invested or deposited the 60[whole or any part of the net consideration] in any specified asset (such specified asset being hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the new asset is not less than the 61[net consideration] in respect of the original asset, the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the new asset is less than the 61[net consideration] in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the new asset bears to the 62[net consideration] shall not be charged under section 45:
63[Provided that in a case where the original asset is transferred after the 28th day of February, 1983, the provisions of this sub-section shall not apply unless the assessee has invested or deposited the whole or, as the case may be, any part of the net consideration in the new asset by initially subscribing to such new asset:]
64[Provided further that in a case where the transfer of the original asset is by way of compulsory acquisition under any law and the full amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer, the period of six months referred to in this sub-section shall, in relation to so much of such compensation as is not received on the date of the transfer, be reckoned from the date immediately following the date on which such compensation is received by the assessee 65[or the 31st day of March, 1992, whichever is earlier].]
Explanation 1.—66[For the purposes of this sub-section, “specified asset” means,—
(a) in a case where the original asset is transferred before the 1st day of March, 1979, any of the following assets, namely:—]
(i) securities of the Central Government or a State Government;
(ii) 67savings certificates as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959 (46 of 1959);
(iii) units in the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);
(iv) debentures specified by the Central Government for the purposes of clause (ii) of sub-section (1) of section 80L;
(v) shares in any Indian company which are issued to the public or are listed in a recognised stock exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder, 68[where the investment in such shares is made before the 1st day of March, 1978];
68[(va) equity shares forming part of any eligible issue of capital, where the investment in such shares is made after the 28th day of February, 1978;]
(vi) deposits for a period of not less than three years with the State Bank of India established under the State Bank of India Act, 1955 (23 of 1955), or any subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) or any nationalised bank, that is to say, any corresponding new bank, constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank);
69[(b) in a case where the original asset is transferred after the 28th day of February, 1979 70[but before the 1st day of March, 1983], such National Rural Development Bonds as the Central Government may notify71 in this behalf in the Official Gazette;]
72[(c) in a case where the original asset is transferred after the 28th day of February, 1983 73[but before the 1st day of April, 1986], any of the following assets, namely :—
(i) securities of the Central Government which that Government may, by notification in the Official Gazette, specify in this behalf;
(ii) special series of units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), which the Central Government may, by notification74 in the Official Gazette, specify in this behalf;
(iii) such National Rural Development Bonds as have been notified74 under clause (b) of Explanation 1 or as may be notified in this behalf under this clause by the Central Government;
(iv) such debentures issued by the Housing and Urban Development Corporation Limited [a 75Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956)], as the Central Government may, by notification in the Official Gazette, specify in this behalf;]
76[(d) in a case where the original asset is transferred after the 31st day of March, 1986, any of the assets specified in clause (c) and such bonds issued by any public sector company, as the Central Government may, by notification77 in the Official Gazette, specify in this behalf;
78[***]]
79[(e) in a case where the original asset is transferred after the 31st day of March, 1989, any of the assets specified in clauses (c) and (d) and such debentures or bonds issued by the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987), as the Central Government may, by notification80 in the Official Gazette, specify in this behalf.]
81[Explanation 2.—”Eligible issue of capital” shall have the meaning assigned to it in sub-section (3) of section 80CC82.]
81[Explanation 3.—An assessee shall not be deemed to have invested the 83[whole or any part of the net consideration in any equity shares referred to in subclause (va) of clause (a)] of Explanation 1, unless the assessee has subscribed to or purchased the shares in the manner specified in sub-section (4) of section 80CC.]
Explanation 84[4].—”Cost”, in relation to any new asset, being a deposit referred to in 85[sub-clause (vi) of clause (a)] of Explanation 1, means the amount of such deposit.
86[Explanation 5.—”Net consideration”, in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.
87[(1A) Where the assessee deposits after the 27th day of April, 1978, the 88[whole or any part of the net consideration in respect] of the original asset in any new asset, being a deposit referred to in 89[sub-clause (vi) of clause (a)] of Explanation 1 below sub-section (1), the cost of such new asset shall not be taken into account for the purposes of that sub-section unless the following conditions are fulfilled, namely :—
(a) the assessee furnishes, along with the deposit, a declaration in writing, to the bank or the co-operative society referred to in the said 89[sub-clause (vi)] with which such deposit is made, to the effect that the assessee will not take any loan or advance on the security of such deposit during a period of three years from the date on which the deposit is made;
(b) the assessee furnishes, along with the return of income for the assessment year relevant to the previous year in which the transfer of the original asset was effected or within such further time as may be allowed by the 90[Assessing] Officer, a copy of the declaration referred to in clause (a) duly attested by an officer not below the rank of sub-agent, agent or manager of such bank or an officer of corresponding rank of such co-operative society.]
91[(1B) Where on the fulfilment of the conditions specified in sub-section (1A), the cost of the new asset referred to in that sub-section is taken into account for the purposes of sub-section (1), the assessee shall, within a period of ninety days from the expiry of the period of three years reckoned from the date of such deposit, furnish to the 92[Assessing] Officer a certificate from the officer referred to in clause (b) of sub-section (1A) to the effect that the assessee has not taken any loan or advance on the security of such deposit during the said period of three years.]
93[(1C) Notwithstanding anything contained in sub-section (1), where the capital gain arises from the transfer of the original asset, made after the 31st day of March, 1992, in respect of which the assessee had received any amount by way of advance on or before the 29th day of February, 1992 and had invested or deposited the whole or any part of such amount in the new asset on or before the later date, then, the provisions of clauses (a) and (b) of sub-section (1) shall apply in the case of such investment or deposit as they apply in the case of investment or deposit under that sub-section.]
(2) Where the new asset is transferred, or converted (otherwise than by transfer) into money, within a period of three years from the date of its acquisition, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head “Capital gains” relating to 94[long-term capital assets] of the previous year in which the new asset is transferred or converted (otherwise than by transfer) into money.]
95[96[Explanation 1].—Where the assessee deposits after the 27th day of April, 1978, the 97[whole or any part of the net consideration in respect] of the original asset in any new asset, being a deposit referred to in 98[sub-clause (vi) of clause (a)] of Explanation 1 below sub-section (1), and such assessee takes any loan or advance on the security of such deposit, he shall be deemed to have converted (otherwise than by transfer) such deposit into money on the date on which such loan or advance is taken.]
99[Explanation 2.—In a case where the original asset is transferred after the 28th day of February, 1983 and the assessee invests the whole or any part of the net consideration in respect of the original asset in any new asset and such assessee takes any loan or advance on the security of such new asset, he shall be deemed to have converted (otherwise than by transfer) such new asset on the date on which such loan or advance is taken.]
1[***]
2[***]
3[***]
4[(3) Where the cost of the equity shares referred to in 5[sub-clause (va) of clause (a)] of Explanation 1 below sub-section (1) is taken into account for the purposes of clause (a) or clause (b) of sub-section (1) 6[***], a deduction with reference to such cost shall not be allowed under section 80CC7.]
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Section 54EA: 8[Capital gain on transfer of long-term capital assets not to be charged in the case of investment in 9[specified securities].
1054EA. (1) Where the capital gain arises from the transfer of a long-term capital asset 11[before the 1st day of April, 2000] (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of the net consideration in any of the 12[bonds, debentures, shares of a public company or units of any mutual fund referred to in clause (23D) of section 10,] specified13 by the Board in this behalf by notification in the Official Gazette (such assets hereafter in this section referred to as the 14[specified securities]), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the 14[specified securities] is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the 14[specified securities] is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the 14[specified securities] bears to the net consideration shall not be charged under section 45.
(2) Where the 14[specified securities] are transferred or converted (otherwise than by transfer) into money at any time within a period of three years from the date of their acquisition, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such 14[specified securities] as provided in clause (a) or clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head “Capital gains” relating to long-term capital assets of the previous year in which the 15[specified securities] are transferred or converted (otherwise than by transfer) into money.
Explanation.—In a case where the original asset is transferred and the assessee invests the whole or any part of the net consideration in respect of the original asset in any 15[specified securities] and such assessee takes any loan or advance on the security of such 15[specified securities], he shall be deemed to have converted (otherwise than by transfer) such 15[specified securities] into money on the date on which such loan or advance is taken.
(3) Where the cost of the 15[specified securities] has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1), a rebate with reference to such cost shall not be allowed under section 88.
Explanation.—For the purposes of this section,—
(a) “cost”, in relation to any 15[specified securities], means the amount invested in such 15[specified securities] out of the net consideration received or accruing as a result of the transfer of the original asset ;
(b) “net consideration”, in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by the expenditure incurred wholly and exclusively in connection with such transfer.
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Section 54EB: Capital gain on transfer of long-term capital assets not to be charged in certain cases.
1654EB. (1) Where the capital gain arises from the transfer of a long-term capital asset 17[before the 1st day of April, 2000] (the capital asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, at any time within a period of six months after the date of such transfer invested the whole or any part of capital gains, in any of the assets specified18 by the Board in this behalf by notification in the Official Gazette (such assets hereafter in this section referred to as the long-term specified assets), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45 ;
(b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45.
Explanation.—“Cost”, in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset.
(2) Where the long-term specified asset is transferred or converted (otherwise than by transfer) into money at any time within a period of seven years from the date of its acquisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long-term specified asset as provided in clause (a), or as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head “Capital gains” relating to long-term capital assets of the previous year in which the long-term specified asset is transferred or converted (otherwise than by transfer) into money.
- —In a case where the original asset is transferred and the assessee invests the whole or any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term specified asset and such assessee takes any loan or advance on the security of such specified asset, he shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the date on which such loan or advance is taken.
(3) Where the cost of the long-term specified asset has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1), a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88.]
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Section 54EC: 19[Capital gain not to be charged on investment in certain bonds.
- (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45 :
20[Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees.]
The following second proviso shall be inserted after the existing proviso to sub-section (1) of section 54EC by the Finance (No. 2) Act, 2014, w.e.f. 1-4-2015 :
Provided further that the investment made by an assessee in the long-term specified asset, from capital gains arising from transfer of one or more original assets, during the financial year in which the original asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees.
(2) Where the long-term specified asset is transferred or converted (otherwise than by transfer) into money at any time within a period of three years from the date of its acquisition, the amount of capital gains arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such long-term specified asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be the income chargeable under the head “Capital gains” relating to long-term capital asset of the previous year in which the long-term specified asset is transferred or converted (otherwise than by transfer) into money.
Explanation.—In a case where the original asset is transferred and the assessee invests the whole or any part of the capital gain received or accrued as a result of transfer of the original asset in any long-term specified asset and such assessee takes any loan or advance on the security of such specified asset, he shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the date on which such loan or advance is taken.
21[(3) Where the cost of the long-term specified asset has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1),—
(a) a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;
(b) a deduction from the income with reference to such cost shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.]
Explanation.—For the purposes of this section,—
(a) “cost”, in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset;
22[(b) “long-term specified asset” for making any investment under this section during the period commencing from the 1st day of April, 2006 and ending with the 31st day of March, 2007, means any bond, redeemable after three years and issued on or after the 1st day of April, 2006, but on or before the 31st day of March, 2007,—
(i) by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988); or
(ii) by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956),22a
and notified23 by the Central Government in the Official Gazette for the purposes of this section with such conditions (including the condition for providing a limit on the amount of investment by an assessee in such bond) as it thinks fit:]
24[Provided that where any bond has been notified before the 1st day of April, 2007, subject to the conditions specified in the notification, by the Central Government in the Official Gazette under the provisions of clause (b) as they stood immediately before their amendment by the Finance Act, 2007, such bond shall be deemed to be a bond notified under this clause;]
25[(ba) “long-term specified asset” for making any investment under this section on or after the 1st day of April, 2007 means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988) or by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956).25a]
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Section 54ED: 26[Capital gain on transfer of certain listed securities or unit not to be charged in certain cases.
- (1) Where the capital gain arises from the transfer 27[before the 1st day of April, 2006,] of a long-term capital asset, being listed securities or unit (the capital asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, within a period of six months after the date of such transfer, invested the whole or any part of the capital gain in acquiring equity shares forming part of an eligible issue of capital (such equity shares being hereafter in this section referred to as the specified equity shares), the said capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the specified equity shares is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45;
(b) if the cost of the specified equity shares is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the specified equity shares acquired bears to the whole of the capital gain shall not be charged under section 45.
Explanation.—For the purposes of this sub-section,—
(i) “eligible issue of capital” means an issue of equity shares which satisfies the following conditions, namely:—
(a) the issue is made by a public company formed and registered in India;
(b) the shares forming part of the issue are offered for subscription to the public;
(ii) “listed securities” shall have the same meaning as in clause (a) of the Explanation to sub-section (1) of section 112;
(iii) “unit” shall have the meaning assigned to it in clause (b) of the Explanation to section 115AB.
(2) Where the specified equity shares are sold or otherwise transferred within a period of one year from the date of their acquisition, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such specified equity shares as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be the income chargeable under the head “Capital gains” relating to long-term capital assets of the previous year in which such equity shares are sold or otherwise transferred.
28[(3) Where the cost of the specified equity shares has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1),—
(a) a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;
(b) a deduction from the income with reference to such cost shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.]]
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Section 54F: 29[Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.30
- (1) 31[Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or 32[two years] after the date on which the transfer took place purchased, or has within a period of three years after that date 32a[constructed, a residential house] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ;
(b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45:
33[Provided that nothing contained in this sub-section shall apply where—
(a) the assessee,—
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and
(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property” .]
- —For the purposes of this section,—
34[***]
35[***] “net consideration”, in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.
(2) Where the assessee purchases, within the period of 36[two years] after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head “Income from house property”, other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head “Capital gains” relating to long-term capital assets of the previous year in which such residential house is purchased or constructed.
(3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head “Capital gains” relating to long-term capital assets of the previous year in which such new asset is transferred.]
37[(4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme38 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset :
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,—
(i) the amount by which—
(a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1),
exceeds
(b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset,
shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and
(ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid.
- —39[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]]
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Section 54G: 40[Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area.
- (1) Subject to the provisions of sub-section (2), where the capital gain arises from the transfer of a capital asset, being machinery or plant or building or land or any rights in building or land used for the purposes of the business of an industrial undertaking situate in an urban area, effected in the course of, or in consequence of, the shifting of such industrial undertaking (hereafter in this section referred to as the original asset) to any area (other than an urban area) and the assessee has within a period of one year before or three years after the date on which the transfer took place,—
(a) purchased new machinery or plant for the purposes of business of the industrial undertaking in the area to which the said undertaking is shifted ;
(b) acquired building or land or constructed building for the purposes of his business in the said area ;
(c) shifted the original asset and transferred the establishment of such undertaking to such area; and
(d) incurred expenses on such other purpose as may be specified in a scheme framed by the Central Government for the purposes of this section,
then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain is greater than the cost and expenses incurred in relation to all or any of the purposes mentioned in clauses (a) to (d) (such cost and expenses being hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be nil ; or
(ii) if the amount of the capital gain is equal to, or less than, the cost of the new asset, the capital gain shall not be charged under section 45 ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be reduced by the amount of the capital gain.
- —In this sub-section, “urban area” means any such area within the limits of a municipal corporation or municipality as the Central Government may, having regard to the population, concentration of industries, need for proper planning of the area and other relevant factors, by general or special order, declare to be an urban area41 for the purposes of this sub-section.
(2) The amount of capital gain which is not appropriated by the assessee towards the cost and expenses incurred in relation to all or any of the purposes mentioned in clauses (a) to (d) of sub-section (1) within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for all or any of the purposes aforesaid before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme42 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for all or any of the purposes aforesaid together with the amount, so deposited shall be deemed to be the cost of the new asset :
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for all or any of the purposes mentioned in clauses (a) to (d) of sub-section (1) within the period specified in that sub-section, then,—
(i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.
- —43[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 54GA: 44[Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone.
- (1) Notwithstanding anything contained in section 54G, where the capital gain arises from the transfer of a capital asset, being machinery or plant or building or land or any rights in building or land used for the purposes of the business of an industrial undertaking situate in an urban area, effected in the course of, or in consequence of the shifting of such industrial undertaking to any Special Economic Zone, whether developed in any urban area or any other area and the assessee has within a period of one year before or three years after the date on which the transfer took place,—
(a) purchased machinery or plant for the purposes of business of the industrial undertaking in the Special Economic Zone to which the said undertaking is shifted;
(b) acquired building or land or constructed building for the purposes of his business in the Special Economic Zone;
(c) shifted the original asset and transferred the establishment of such undertaking to the Special Economic Zone; and
(d) incurred expenses on such other purposes as may be specified in a scheme framed by the Central Government for the purposes of this section,
then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall, subject to the provisions of sub-section (2), be dealt with in accordance with the following provisions of this section, that is to say,—
(i) if the amount of the capital gain is greater than the cost and expenses incurred in relation to all or any of the purposes mentioned in clauses (a) to (d) (such cost and expenses being hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be Nil; or
(ii) if the amount of the capital gain is equal to, or less than, the cost of the new asset, the capital gain shall not be charged under section 45, and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its being purchased, acquired, constructed or transferred, as the case may be, the cost shall be reduced by the amount of the capital gain.
- —In this sub-section,—
(a) “Special Economic Zone” shall have the meaning assigned to it in clause (za) of *[section 2 of] the Special Economic Zones Act, 200545;
(b) “urban area” means any such area within the limits of a municipal corporation or municipality as the Central Government may, having regard to the population, concentration of industries, need for proper planning of the area and other relevant factors, by general or special order, declare to be an urban area for the purposes of this sub-section.
(2) The amount of capital gain which is not appropriated by the assessee towards the cost and expenses incurred in relation to all or any of the purposes mentioned in clauses (a) to (d) of sub-section (1) within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for all or any of the purposes aforesaid before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme46 which the Central Government may, by notification, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for all or any of the aforesaid purposes together with the amount so deposited shall be deemed to be the cost of the new asset :
Provided that if the amount deposited under this sub-section is not utilised wholly or partly for all or any of the purposes mentioned in clauses (a) to (d) of sub-section (1) within the period specified in that sub-section, then,—
(i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and
(ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.]
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Section 54GB: 47[Capital gain on transfer of residential property not to be charged in certain cases
- (1) Where,—
(i) the capital gain arises from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee (herein referred to as the assessee); and
(ii) the assessee, before the due date of furnishing of return of income under sub-section (1) of section 139, utilises the net consideration for subscription in the equity shares of an eligible company (herein-referred to as the company); and
(iii) the company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of new asset,
then, instead of the capital gain being charged to income-tax as the income of the previous year in which the transfer takes place, it shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the amount of the net consideration is greater than the cost of the new asset, then, so much of the capital gain as it bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45 as the income of the previous year; or
(b) if the amount of the net consideration is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45 as the income of the previous year.
(2) The amount of the net consideration, which has been received by the company for issue of shares to the assessee, to the extent it is not utilised by the company for the purchase of the new asset before the due date of furnishing of the return of income by the assessee under section 139, shall be deposited by the company, before the said due date in an account in any such bank or institution as may be specified and shall be utilised in accordance with any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and the return furnished by the assessee shall be accompanied by proof of such deposit having been made.
(3) For the purposes of sub-section (1), the amount, if any, already utilised by the company for the purchase of the new asset together with the amount deposited under sub-section (2) shall be deemed to be the cost of the new asset:
Provided that if the amount so deposited is not utilised, wholly or partly, for the purchase of the new asset within the period specified in sub-section (1), then,—
(i) the amount by which—
(a) the amount of capital gain arising from the transfer of the residential property not charged under section 45 on the basis of the cost of the new asset as provided in sub-section (1),
exceeds—
(b) the amount that would not have been so charged had the amount actually utilised for the purchase of the new asset within the period specified in sub-section (1) been the cost of the new asset,
shall be charged under section 45 as income of the assessee for the previous year in which the period of one year from the date of the subscription in equity shares by the assessee expires; and
(ii) the company shall be entitled to withdraw such amount in accordance with the scheme.
(4) If the equity shares of the company or the new asset acquired by the company are sold or otherwise transferred within a period of five years from the date of their acquisition, the amount of capital gain arising from the transfer of the residential property not charged under section 45 as provided in sub-section (1) shall be deemed to be the income of the assessee chargeable under the head “Capital gains” of the previous year in which such equity shares or such new asset are sold or otherwise transferred, in addition to taxability of gains, arising on account of transfer of shares or of the new asset, in the hands of the assessee or the company, as the case may be.
(5) The provisions of this section shall not apply to any transfer of residential property made after the 31st day of March, 2017.
(6) For the purposes of this section,—
(a) “eligible assessee” means an individual or a Hindu undivided family;
(b) “eligible company” means a company which fulfils the following conditions, namely:—
(i) it is a company incorporated in India during the period from the 1st day of April of the previous year relevant to the assessment year in which the capital gain arises to the due date of furnishing of return of income under sub-section (1) of section 139 by the assessee;
(ii) it is engaged in the business of manufacture of an article or a thing;
(iii) it is a company in which the assessee has more than fifty per cent share capital or more than fifty per cent voting rights after the subscription in shares by the assessee; and
(iv) it is a company which qualifies to be a small or medium enterprise under the Micro, Small and Medium Enterprises Act, 2006 (27 of 2006);
(c) “net consideration” shall have the meaning assigned to it in the Explanation to section 54F;
(d) “new asset” means new plant and machinery but does not include—
(i) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person;
(ii) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house;
(iii) any office appliances including computers or computer software;
(iv) any vehicle; or
(v) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any previous year.]
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Section 54H: 48[Extension of time for acquiring new asset or depositing or investing amount of capital gain.
- Notwithstanding anything contained in sections 54, 54B, 54D 49[***] 50[, 54EC] and 54F, where the transfer of the original asset is by way of compulsory acquisition under any law and the amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer, the period for acquiring the new asset by the assessee referred to in those sections or, as the case may be, the period available to the assessee under those sections for depositing or investing the amount of capital gain in relation to such compensation as is not received on the date of the transfer, shall be reckoned from the date of receipt of such compensation :
Provided that where the compensation in respect of transfer of the original asset by way of compulsory acquisition under any law is received before the 1st day of April, 1991, the aforesaid period or periods, if expired, shall extend up to the 31st day of December, 1991.]
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Section 55: Meaning of “adjusted”, “cost of improvement” and “cost of acquisition” .
- 51 (1) For the purposes of 52[sections 48 and 49],—
(a) 53[***]
54[(b) “cost of any improvement”,—
(1) in relation to a capital asset being goodwill of a business 55[or a right to manufacture, produce or process any article or thing] 56[or right to carry on any business] shall be taken to be nil ; and
(2) in relation to any other capital asset,—]
(i) where the capital asset became the property of the previous owner or the assessee before the 57[1st day of April, 58[1981]], 59[***] means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset on or after the said date by the previous owner or the assessee, and
(ii) in any other case, means all expenditure of a capital nature incurred in making any additions or alterations to the capital asset by the assessee after it became his property, and, where the capital asset became the property of the assessee by any of the modes specified in 60[sub-section (1) of] section 49, by the previous owner,
but does not include any expenditure which is deductible in computing the income chargeable under the head “Interest on securities”, “Income from house property”, “Profits and gains of business or profession”, or “Income from other sources”, and the expression “improvement” shall be construed accordingly.
61(2) 62[For the purposes of sections 48 and 49, “cost of acquisition” 63,—
64[(a) in relation to a capital asset, being goodwill of a business 65[or a trade mark or brand name associated with a business] 66[or a right to manufacture, produce or process any article or thing] 67[or right to carry on any business], tenancy rights, stage carriage permits or loom hours,—
(i) in the case of acquisition of such asset by the assessee by purchase from a previous owner, means the amount of the purchase price ; and
(ii) in any other case [not being a case falling under sub-clauses (i) to (iv) of sub-section (1) of section 49], shall be taken to be nil ;
(aa) 68[in a case where, by virtue of holding a capital asset, being a share or any other security69, within the meaning of clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (hereafter in this clause referred to as the financial asset), the assessee—
(A) becomes entitled to subscribe to any additional financial asset ; or
(B) is allotted any additional financial asset without any payment,
then, subject to the provisions of sub-clauses (i) and (ii) of clause (b)],—
(i) in relation to the original financial asset, on the basis of which the assessee becomes entitled to any additional financial asset, means the amount actually paid for acquiring the original financial asset ;
(ii) in relation to any right to renounce the said entitlement to subscribe to the financial asset, when such right is renounced by the assessee in favour of any person, shall be taken to be nil in the case of such assessee ;
(iii) in relation to the financial asset, to which the assessee has subscribed on the basis of the said entitlement, means the amount actually paid by him for acquiring such asset ;
70[(iiia) in relation to the financial asset allotted to the assessee without any payment and on the basis of holding of any other financial asset, shall be taken to be nil in the case of such assessee ;] and
(iv) in relation to any financial asset purchased by any person in whose favour the right to subscribe to such asset has been renounced, means the aggregate of the amount of the purchase price paid by him to the person renouncing such right and the amount paid by him to the company or institution, as the case may be, for acquiring such financial asset ;]
71[(ab) in relation to a capital asset, being equity share or shares allotted to a shareholder of a recognised stock exchange in India under a scheme for 72[demutualisation or] corporatisation approved by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), shall be the cost of acquisition of his original membership of the exchange:]
73[Provided that the cost of a capital asset, being trading or clearing rights of the recognised stock exchange acquired by a shareholder who has been allotted equity share or shares under such scheme of demutualisation or corporatisation, shall be deemed to be nil;]
(b) in relation to any other capital asset,—]
(i) where the capital asset became the property of the assessee74 before the 75[1st day of April, 76[1981]], means the cost of acquisition of the asset to the assessee or the fair77 market value of the asset on the 78[1st day of April, 79[1981]], at the option of the assessee ;
(ii) where the capital asset became the property of the assessee80 by any of the modes specified in 81[sub-section (1) of] section 49, and the capital asset became the property of the previous owner before the 82[1st day of April, 83[1981]], means the cost of the capital asset to the previous owner or the fair84 market value of the asset on the 82[1st day of April, 83[1981]], at the option of the assessee ;
(iii) where the capital asset became the property of the assessee80 on the distribution of the capital assets of a company on its liquidation and the assessee has been assessed to income-tax under the head “Capital gains” in respect of that asset under section 46, means the fair84 market value of the asset on the date of distribution ;
(iv) 85[***]
86[(v) where the capital asset, being a share or a stock of a company, became the property of the assessee on—
(a) the consolidation and division of all or any of the share capital of the company into shares of larger amount than its existing shares,
(b) the conversion of any shares of the company into stock,
(c) the re-conversion of any stock of the company into shares,
(d) the sub-division of any of the shares of the company into shares of smaller amount, or
(e) the conversion of one kind of shares of the company into another kind,
means the cost of acquisition of the asset calculated with reference to the cost of acquisition of the shares or stock from which such asset is derived.]
(3) Where the cost for which the previous owner acquired the property cannot be ascertained, the cost of acquisition to the previous owner means the fair market value on the date on which the capital asset became the property of the previous owner.
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Section 55A: 87[Reference to Valuation Officer.
8855A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter89, the 90[Assessing] Officer may refer the valuation of capital asset to a Valuation Officer—
(a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the 90[Assessing] Officer is of opinion that the value so claimed 91[is at variance with its fair market value];
(b) in any other case, if the 90[Assessing] Officer is of opinion—
(i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage92 of the value of the asset as so claimed or by more than such amount92 as may be prescribed in this behalf ; or
(ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do,
93and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the 94[Assessing] Officer under sub-section (1) of section 16A of that Act.
- —In this section, “Valuation Officer” has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).]
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Section 56: Income from other sources
Income from other sources.
- 95 (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head “Income from other sources”, if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E.
(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head “Income from other sources”, namely :—
(i) dividends ;
96[(ia) income referred to in sub-clause (viii) of clause (24) of section 2 ;]
97[(ib) income referred to in sub-clause (ix) of clause (24) of section 2 ;]
98[(ic) income referred to in sub-clause (x) of clause (24) of section 2, if such income is not chargeable to income-tax under the head “Profits and gains of business or profession” ;]
99[(id) income by way of interest on securities, if the income is not chargeable to income-tax under the head “Profits and gains of business or profession” ;]
(ii) income from machinery, plant or furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head “Profits and gains of business or profession” ;
(iii) where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, the income from such letting, if it is not chargeable to income-tax under the head “Profits and gains of business or profession” ;
1[(iv) income referred to in sub-clause (xi) of clause (24) of section 2, if such income is not chargeable to income-tax under the head “Profits and gains of business or profession” or under the head “Salaries” ;]
2[(v) where any sum of money exceeding twenty-five thousand rupees is received without consideration by an individual or a Hindu undivided family from any person on or after the 1st day of September, 2004 3[but before the 1st day of April, 2006], the whole of such sum :
Provided that this clause shall not apply to any sum of money received—
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer; or
4[(e) from any local authority as defined in the Explanation to clause (20) of section 10; or
(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or
(g) from any trust or institution registered under section 12AA.]
Explanation.—For the purposes of this clause, “relative” means—
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi);]
5[(vi) where any sum of money, the aggregate value of which exceeds fifty thousand rupees, is received without consideration, by an individual or a Hindu undivided family, in any previous year from any person or persons on or after the 1st day of April, 2006 6[but before the 1st day of October, 2009], the whole of the aggregate value of such sum:
Provided that this clause shall not apply to any sum of money received—
(a) from any relative; or
(b) on the occasion of the marriage of the individual6a; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer; or
(e) from any local authority as defined in the Explanation to clause (20) of section 10; or
(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or
(g) from any trust or institution registered under section 12AA.
Explanation.—For the purposes of this clause, “relative” means—
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi);]
7[(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;
8[(b) any immovable property,—
(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;
(ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration:
Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause:
Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property;]
(c) any property, other than immovable property,—
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration :
Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections :
Provided further that this clause shall not apply to any sum of money or any property received—
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer or donor, as the case may be; or
(e) from any local authority as defined in the Explanation to clause (20) of section 10; or
(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or
(g) from any trust or institution registered under section 12AA.
- —For the purposes of this clause,—
(a) “assessable” shall have the meaning assigned to it in the Explanation 2 to sub-section (2) of section 50C;
(b) “fair market value” of a property, other than an immovable property, means the value determined in accordance with the method as may be prescribed9;
(c) “jewellery” shall have the meaning assigned to it in the Explanation to sub-clause (ii) of clause (14) of section 2;
(d) “property” 10[means the following capital asset of the assessee, namely:—]
(i) immovable property being land or building or both;
(ii) shares and securities;
(iii) jewellery;
(iv) archaeological collections;
(v) drawings;
(vi) paintings;
(vii) sculptures; 11[***]
(viii) any work of art; 12[or]
12[(ix) bullion;]
13[(e) “relative” means,—
(i) in case of an individual—
(A) spouse of the individual;
(B) brother or sister of the individual;
(C) brother or sister of the spouse of the individual;
(D) brother or sister of either of the parents of the individual;
(E) any lineal ascendant or descendant of the individual;
(F) any lineal ascendant or descendant of the spouse of the individual;
(G) spouse of the person referred to in items (B) to (F); and
(ii) in case of a Hindu undivided family, any member thereof;]
(f) “stamp duty value” means the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property;]
14[(viia) where a firm or a company not being a company in which the public are substantially interested, receives, in any previous year, from any person or persons, on or after the 1st day of June, 2010, any property, being shares of a company not being a company in which the public are substantially interested,—
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration :
Provided that this clause shall not apply to any such property received by way of a transaction not regarded as transfer under clause (via) or clause (vic) or clause (vicb) or clause (vid) or clause (vii) of section 47.
- —For the purposes of this clause, “fair market value” of a property, being shares of a company not being a company in which the public are substantially interested, shall have the meaning assigned to it in the Explanation to clause (vii);]
15[(viib) where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares:
Provided that this clause shall not apply where the consideration for issue of shares is received—
(i) by a venture capital undertaking from a venture capital company or a venture capital fund; or
(ii) by a company from a class or classes of persons as may be notified by the Central Government in this behalf.
Explanation.—For the purposes of this clause,—
(a) the fair market value of the shares shall be the value—
(i) as may be determined in accordance with such method as may be prescribed16; or
(ii) as may be substantiated by the company to the satisfaction of the Assessing Officer, based on the value, on the date of issue of shares, of its assets, including intangible assets being goodwill, know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature,
whichever is higher;
(b) “venture capital company”, “venture capital fund” and “venture capital undertaking” shall have the meanings respectively assigned to them in clause (a), clause (b) and clause (c) of 17[Explanation] to clause (23FB) of section 10;]
18[(viii) income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A.]
The following clause (ix) shall be inserted after clause (viii) of sub-section (2) of section 56 by the Finance (No. 2) Act, 2014 w.e.f. 1-4-2015 :
(ix) any sum of money received as an advance or otherwise in the course of negotiations for transfer of a capital asset, if,—
(a) such sum is forfeited; and
(b) the negotiations do not result in transfer of such capital asset.
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Section 57: Deductions.
- 19 The income chargeable under the head “Income from other sources” shall be computed after making the following deductions, namely :—
(i) in the case of dividends, 20[other than dividends referred to in section 115-O,] 21[or interest on securities], any reasonable sum paid by way of commission or remuneration to a banker or any other person for the purpose of realising such dividend 22[or interest] on behalf of the assessee ;
23[(ia) in the case of income of the nature referred to in sub-clause (x) of clause (24) of section 2 which is chargeable to income-tax under the head “Income from other sources”, deductions, so far as may be, in accordance with the provisions of clause (va) of sub-section (1) of section 36 ;]
(ii) in the case of income of the nature referred to in clauses (ii) and (iii) of sub-section (2) of section 56, deductions, so far as may be, in accordance with the provisions of sub-clause (ii) of clause (a) and clause (c) of section 30, section 31 and 24[sub-sections (1) 25[***] and (2)] of section 32 and subject to the provisions of 26[section 38] ;
27[(iia) in the case of income in the nature of family pension, a deduction of a sum equal to thirty-three and one-third per cent of such income or 28[fifteen] thousand rupees, whichever is less.
- —For the purposes of this clause, “family pension” means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death ;]
(iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose29 of making or earning such income;
30[(iv) in the case of income of the nature referred to in clause (viii) of sub-section (2) of section 56, a deduction of a sum equal to fifty per cent of such income and no deduction shall be allowed under any other clause of this section.]
31[***]
- —[Omitted by the Finance Act, 1988, w.e.f. 1-4-1989.]
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Section 58: Amounts not deductible.
- 32 33[(1)] Notwithstanding anything to the contrary contained in section 57, the following amounts shall not be deductible in computing the income chargeable under the head “Income from other sources”, namely :—
(a) in the case of any assessee,—
(i) any personal expenses of the assessee ;
34[(ia) any expenditure of the nature referred to in sub-section (12)35 of section 40A ;]
(ii) any interest chargeable under this Act which is payable outside India (not being interest on a loan issued for public subscription before the 1st day of April, 1938) on which tax has not been paid or deducted under Chapter XVII-B 36[***] ;
(iii) any payment which is chargeable under the head “Salaries”, if it is payable outside India, unless tax has been paid thereon or deducted therefrom under Chapter XVII-B ;
(iv) 37[***]
(b) 38[***]
39[(1A) The provisions of sub-clause (iia) of clause (a) of section 40 shall, so far as may be, apply in computing the income chargeable under the head “Income from other sources” as they apply in computing the income chargeable under the head “Profits and gains of business or profession” .]
40[(2) The provisions of section 40A shall, so far as may be, apply in computing the income chargeable under the head “Income from other sources” as they apply in computing the income chargeable under the head “Profits and gains of business or profession” .]
41[(3) In the case of an assessee, being a foreign company, the provisions of section 44D shall, so far as may be, apply in computing the income chargeable under the head “Income from other sources” as they apply in computing the income chargeable under the head “Profits and gains of business or profession” .]
42[(4) In the case of an assessee having income chargeable under the head “Income from other sources”, no deduction in respect of any expenditure or allowance in connection with such income shall be allowed under any provision of this Act in computing the income by way of any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature, whatsoever :
Provided that nothing contained in this sub-section shall apply in computing the income of an assessee, being the owner of horses maintained by him for running in horse races, from the activity of owning and maintaining such horses.
- —For the purposes of this sub-section, “horse race” means a horse race upon which wagering or betting may be lawfully made.]
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Section 59: Profits chargeable to tax.
- (1) The provisions of sub-section (1) of section 41 shall apply, so far as may be, in computing the income of an assessee under section 56, as they apply in computing the income of an assessee under the head “Profits and gains of business or profession” .
(2) 43[***]
(3) 44[***]
45[***]
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CHAPTER V – INCOME OF OTHER PERSONS, INCLUDED IN ASSESSEE’S TOTAL INCOME
Section 60: Transfer of income where there is no transfer of assets.
- 46 All income arising to any person by virtue of a transfer47 whether revocable or not and whether effected before or after the commencement of this Act shall, where there is no transfer of the assets from which the income arises, be chargeable to income-tax as the income of the transferor and shall be included in his total income.
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Section 61: Revocable transfer of assets.
- All income arising to any person by virtue of a revocable transfer48 of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income.
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Section 62: Transfer irrevocable for a specified period.
- 49 (1) The provisions of section 61 shall not apply to any income arising to any person by virtue of a transfer—
(i) by way of trust which is not revocable during the lifetime of the beneficiary, and, in the case of any other transfer, which is not revocable during the lifetime of the transferee ; or
(ii) made before the 1st day of April, 1961, which is not revocable for a period exceeding six years :
Provided that the transferor derives no direct or indirect benefit from such income in either case.
(2) Notwithstanding anything contained in sub-section (1), all income arising to any person by virtue of any such transfer shall be chargeable to income-tax as the income of the transferor as and when the power to revoke the transfer arises, and shall then be included in his total income.
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Section 62: Transfer irrevocable for a specified period.
- 49 (1) The provisions of section 61 shall not apply to any income arising to any person by virtue of a transfer—
(i) by way of trust which is not revocable during the lifetime of the beneficiary, and, in the case of any other transfer, which is not revocable during the lifetime of the transferee ; or
(ii) made before the 1st day of April, 1961, which is not revocable for a period exceeding six years :
Provided that the transferor derives no direct or indirect benefit from such income in either case.
(2) Notwithstanding anything contained in sub-section (1), all income arising to any person by virtue of any such transfer shall be chargeable to income-tax as the income of the transferor as and when the power to revoke the transfer arises, and shall then be included in his total income.
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Section 64: Income of individual to include income of spouse, minor child, etc.
- 52 53[54[(1)] In computing the total income of any individual, there shall be included all such income as arises directly or indirectly—
(i) 55[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
(ii) to the spouse56 of such individual56 by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest :
57[Provided that nothing in this clause shall apply in relation to any income arising to the spouse where the spouse56 possesses technical or professional qualifications56 and the income is solely attributable to the application of his or her technical or professional knowledge and experience ;]
(iii) 58[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
(iv) subject to the provisions of clause (i) of section 27, 59[* * *] to the spouse60 of such individual from assets transferred60 directly or indirectly to the spouse by such individual otherwise than for adequate consideration60 or in connection with an agreement to live apart ;
(v) 61[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
(vi) to the son’s wife, 62[* * *] of such individual, from assets transferred60 directly or indirectly on or after the 1st day of June, 1973, to the son’s wife 62[* * *] by such individual otherwise than for adequate consideration60; 63[* * *]
(vii) to any person64 or association of persons from assets transferred64 directly or indirectly otherwise than for adequate consideration64 to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit64 of his or her spouse 65[* * *]; and]
66[(viii) to any person67 or association of persons from assets transferred67 directly or indirectly on or after the 1st day of June, 1973, otherwise than for adequate consideration67, to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit67 of his son’s wife 68[* * *].]
69[Explanation 1.—For the purposes of clause (ii), the individual in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater ; and where any such income is once included in the total income of either spouse, any such income arising in any succeeding year shall not be included in the total income of the other spouse unless the Assessing Officer is satisfied, after giving that spouse an opportunity of being heard, that it is necessary70 so to do.]
Explanation 2.—For the purposes of clause (ii), an individual shall be deemed to have a substantial interest in a concern—
(i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of his relatives ;
(ii) in any other case, if such person is entitled, or such person and one or more of his relatives are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern.
Explanation 2A.—71[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
72[Explanation 3.—For the purposes of clauses (iv) and (vi), where the assets transferred directly or indirectly by an individual to his spouse or son’s wife (hereafter in this Explanation referred to as “the transferee” ) are invested by the transferee,—
(i) in any business, such investment being not in the nature of contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the income arising out of the business to the transferee in any previous year, which bears the same proportion to the income of the transferee from the business as the value of the assets aforesaid as on the first day of the previous year bears to the total investment in the business by the transferee as on the said day ;
(ii) in the nature of contribution of capital as a partner in a firm, that part of the interest receivable by the transferee from the firm in any previous year, which bears the same proportion to the interest receivable by the transferee from the firm as the value of investment aforesaid as on the first day of the previous year bears to the total investment by way of capital contribution as a partner in the firm as on the said day,
shall be included in the total income of the individual in that previous year.]
73[(1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child 74[, not being a minor child suffering from any disability of the nature specified in section 80U] :
Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any—
(a) manual work done by him; or
(b) activity involving application of his skill, talent or specialised know-ledge and experience.
- —For the purposes of this sub-section, the income of the minor child shall be included,—
(a) where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater ; or
(b) where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year,
and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.]
75[(2) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it 76[into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property)], then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1971,—
(a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly ;
(b) the income derived from the converted property or any part thereof77 78[* * *] shall be deemed to arise to the individual and not to the family ;
79[(c) where the converted property has been the subject-matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse 80[* * *] on partition shall be deemed to arise to the spouse 80[* * *] from assets transferred indirectly by the individual to the spouse 80[* * *] and the provisions of sub-section (1) shall, so far as may be, apply accordingly :]
Provided that the income referred to in clause (b) or clause (c) shall, on being included in the total income of the individual, be excluded from the total income of the family or, as the case may be, the spouse 81[* * *] of the individual.
Explanation 82[1].—For the purposes of sub-section (2),—
83[* * *] “property” includes any interest in property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property.
84[* * *]]
85[Explanation 2.—For the purposes of this section, “income” includes loss.]
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Section 65: Liability of person in respect of income included in the income of another person.
- Where, by reason of the provisions contained in this Chapter or in clause (i) of section 27, the income from any asset or from membership in a firm of a person other than the assessee is included in the total income of the assessee, the person in whose name such asset stands or who is a member of the firm shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be liable, on the service of a notice of demand by the 86[Assessing] Officer in this behalf, to pay that portion of the tax levied on the assessee which is attributable to the income so included, and the provisions of Chapter XVII-D shall, so far as may be, apply accordingly :
Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax which is attributable to the income from the assets so included.
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CHAPTER VI – AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS
Section 66: Total income.
- In computing the total income of an assessee, there shall be included all income on which no income-tax is payable under Chapter VII 87[* * *].
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Section 67: Method of computing a partner’s share in the income of the firm.
- 88[Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
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Section 67A: 89[Method of computing a member’s share in income of association of persons or body of individuals.
- (1) In computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a cooperative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net profit or net loss) shall be computed as follows, namely :—
(a) any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body ;
(b) where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member’s share in the income of the association or body ;
(c) where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member’s share in the income of the association or body.
(2) The share of a member in the income or loss of the association or body, as computed under sub-section (1), shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income.
(3) Any interest paid by a member on capital borrowed by him for the purposes of investment in the association or body shall, in computing his share chargeable under the head “Profits and gains of business or profession” in respect of his share in the income of the association or body, be deducted from his share.
- —In this section, “paid” has the same meaning as is assigned to it in clause (2) of section 43.]
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Section 68: Cash credits.
- 90 91Where any sum is found credited in the books92 of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the 93[Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year :
94[Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—
(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and
(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:
Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.]
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Section 69: Unexplained investments.
- 95 Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the 96[Assessing] Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.
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Section 69A: 97[Unexplained money, etc.
9869A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income99, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the 1[Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income99 of the assessee for such financial year.]
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Section 69B: 2[Amount of investments, etc., not fully disclosed in books of account.
9869B. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the 3[Assessing] Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the 3[Assessing] Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.]
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Section 69C: 4[Unexplained expenditure, etc.
569C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the 6[Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year :]
7[Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.]
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Section 69D: 8[Amount borrowed or repaid on hundi.
969D. Where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the previous year in which the amount was borrowed or repaid, as the case may be :
Provided that, if in any case any amount borrowed on a hundi has been deemed under the provisions of this section to be the income of any person, such person shall not be liable to be assessed again in respect of such amount under the provisions of this section on repayment of such amount.
- —For the purposes of this section, the amount repaid shall include the amount of interest paid on the amount borrowed.]
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Section 70: 10[Set off of loss from one source against income from another source under the same head of income.
- (1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income, other than “Capital gains”, is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head.
(2) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short-term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset.
(3) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset (other than a short-term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short-term capital asset.]
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Section 71: 11[Set off of loss from one head against income from another.
- 12 (1) Where in respect of any assessment year the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to13 have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.
(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).
14[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set off against such income.]
(3) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]
15[(4) Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]
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Section 71A: 16[Transitional provisions for set off of loss under the head “Income from house property” .
- Where in respect of the assessment year commencing on the 1st day of April, 1993 or the 1st day of April, 1994, the net result of the computation under the head “Income from house property” is a loss, such loss in so far as it relates to interest on borrowed capital referred to in clause (vi) of sub-section (1) of section 24 and to the extent it has not been set off shall be carried forward and set off in the assessment year commencing on the 1st day of April, 1995, and the balance, if any, in the assessment year commencing on the 1st day of April, 1996, against the income under any head.]
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Section 71B: 17[Carry forward and set off of loss from house property.
- Where for any assessment year the net result of computation under the head “Income from house property” is a loss to the assessee and such loss cannot be or is not wholly set off against income from any other head of income in accordance with the provisions of section 71, so much of the loss as has not been so set-off or where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and—
(i) be set off against the income from house property assessable for that assessment year; and
(ii) the loss, if any, which has not been set off wholly, the amount of loss not so set off,
shall be carried forward to the following assessment year, not being more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.]
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Section 72: Carry forward and set off of business losses.
- 18 19[(1) Where for any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, 20[* * *] where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(i) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ;
21[* * *]
(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on :]
22[Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and, thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re-established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and—
(a) it shall be set off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding.]
(2) Where any allowance or part thereof is, under sub-section (2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section.
(3) No loss 23[(other than the loss referred to in the proviso to sub-section (1) of this section)] shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.
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Section 72A: 24[Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.25
- 26[(1) Where there has been an amalgamation of—
(a) a company owning an industrial undertaking or a ship or a hotel with another company; or
(b) a banking company referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)27 with a specified bank; or
(c) one or more public sector company or companies engaged in the business of operation of aircraft with one or more public sector company or companies engaged in similar business,
then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly.]
28[(2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be set off or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of the amalgamated company unless—
(a) the amalgamating company—
(i) has been engaged in the business, in which the accumulated loss occurred or depreciation remains unabsorbed, for three or more years;
(ii) has held continuously as on the date of the amalgamation at least three-fourths of the book value of fixed assets held by it two years prior to the date of amalgamation;
(b) the amalgamated company—
(i) holds continuously for a minimum period of five years from the date of amalgamation at least three-fourths of the book value of fixed assets of the amalgamating company acquired in a scheme of amalgamation;
(ii) continues the business of the amalgamating company for a minimum period of five years from the date of amalgamation;
(iii) fulfils such other conditions as may be prescribed29 to ensure the revival of the business of the amalgamating company or to ensure that the amalgamation is for genuine business purpose.]
(3) In a case where any of the conditions laid down in sub-section (2) are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the amalgamated company shall be deemed to be the income of the amalgamated company chargeable to tax for the year in which such conditions are not complied with.
(4) Notwithstanding anything contained in any other provisions of this Act, in the case of a demerger, the accumulated loss and the allowance for unabsorbed depreciation of the demerged company shall—
(a) where such loss or unabsorbed depreciation is directly relatable to the undertakings transferred to the resulting company, be allowed to be carried forward and set off in the hands of the resulting company;
(b) where such loss or unabsorbed depreciation is not directly relatable to the undertakings transferred to the resulting company, be apportioned between the demerged company and the resulting company in the same proportion in which the assets of the undertakings have been retained by the demerged company and transferred to the resulting company, and be allowed to be carried forward and set off in the hands of the demerged company or the resulting company, as the case may be.
(5) The Central Government may, for the purposes of this Act, by notification in the Official Gazette, specify such conditions as it considers necessary to ensure that the demerger is for genuine business purposes.
(6) Where there has been reorganisation of business, whereby, a firm is succeeded by a company fulfilling the conditions laid down in clause (xiii) of section 47 or a proprietary concern is succeeded by a company fulfilling the conditions laid down in clause (xiv) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor firm or the proprietary concern, as the case may be, shall be deemed to be the loss or allowance for depreciation of the successor company for the purpose of previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly :
Provided that if any of the conditions laid down in the proviso to clause (xiii) or the proviso to clause (xiv) to section 47 are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the successor company, shall be deemed to be the income of the company chargeable to tax in the year in which such conditions are not complied with.
30[(6A) Where there has been reorganisation of business whereby a private company or unlisted public company is succeeded by a limited liability partnership fulfilling the conditions laid down in the proviso to clause (xiiib) of section 47, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the predecessor company, shall be deemed to be the loss or allowance for depreciation of the successor limited liability partnership for the purpose of the previous year in which business reorganisation was effected and other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly :
Provided that if any of the conditions laid down in the proviso to clause (xiiib) of section 47 are not complied with, the set off of loss or allowance of depreciation made in any previous year in the hands of the successor limited liability partnership, shall be deemed to be the income of the limited liability partnership chargeable to tax in the year in which such conditions are not complied with.]
(7) For the purposes of this section,—
31[(a) “accumulated loss” means so much of the loss of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, would have been entitled to carry forward and set off under the provisions of section 72 if the reorganisation of business or conversion or amalgamation or demerger had not taken place;]
32[(aa) “industrial undertaking” means any undertaking which is engaged in—
(i) the manufacture or processing of goods; or
(ii) the manufacture of computer software; or
(iii) the business of generation or distribution of electricity or any other form of power; or
33[(iiia) the business of providing telecommunication services, whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services; or]
(iv) mining; or
(v) the construction of ships, aircrafts or rail systems;]
34[(b) “unabsorbed depreciation” means so much of the allowance for depreciation of the predecessor firm or the proprietary concern or the private company or unlisted public company before conversion into limited liability partnership or the amalgamating company or the demerged company, as the case may be, which remains to be allowed and which would have been allowed to the predecessor firm or the proprietary concern or the company or amalgamating company or demerged company, as the case may be, under the provisions of this Act, if the reorganisation of business or conversion or amalgamation or demerger had not taken place;]]
35[(c) “specified bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955) or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959) or 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).]
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Section 72AA: 36[Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation of banking company in certain cases.
- Notwithstanding anything contained in sub-clauses (i) to (iii) of clause (1B) of section 2 or section 72A, where there has been an amalgamation of a banking company with any other banking institution under a scheme sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949)37, the accumulated loss and the unabsorbed depreciation of such banking company shall be deemed to be the loss or, as the case may be, allowance for depreciation of such banking institution for the previous year in which the scheme of amalgamation was brought into force and other provisions of this Act relating to set-off and carry forward of loss and allowance for depreciation shall apply accordingly.
Explanation.—For the purposes of this section,—
(i) “accumulated loss” means so much of the loss of the amalgamating banking company under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such amalgamating banking company, would have been entitled to carry forward and set-off under the provisions of section 72 if the amalgamation had not taken place;
(ii) “banking company” shall have the same meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)37;
(iii) “banking institution” shall have the same meaning assigned to it in sub-section (15) of section 45 of the Banking Regulation Act, 1949 (10 of 1949)37;
(iv) “unabsorbed depreciation” means so much of the allowance for depreciation of the amalgamating banking company which remains to be allowed and which would have been allowed to such banking company if amalgamation had not taken place.]
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Section 72AB: 38[Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks.
- (1) The assessee, being a successor co-operative bank, shall, in a case where the amalgamation has taken place during the previous year, be allowed to set off the accumulated loss and the unabsorbed depreciation, if any, of the predecessor co-operative bank as if the amalgamation had not taken place, and all the other provisions of this Act relating to set off and carry forward of loss and allowance for depreciation shall apply accordingly.
(2) The provisions of this section shall apply if—
(a) the predecessor co-operative bank—
(i) has been engaged in the business of banking for three or more years; and
(ii) has held at least three-fourths of the book value of fixed assets as on the date of the business reorganisation, continuously for two years prior to the date of business reorganisation;
(b) the successor co-operative bank—
(i) holds at least three-fourths of the book value of fixed assets of the predecessor co-operative bank acquired through business reorganisation, continuously for a minimum period of five years immediately succeeding the date of business reorganisation;
(ii) continues the business of the predecessor co-operative bank for a minimum period of five years from the date of business reorganisation; and
(iii) fulfils such other conditions as may be prescribed to ensure the revival of the business of the predecessor co-operative bank or to ensure that the business reorganisation is for genuine business purpose.
(3) The amount of set-off of the accumulated loss and unabsorbed depreciation, if any, allowable to the assessee being a resulting co-operative bank shall be,—
(i) the accumulated loss or unabsorbed depreciation of the demerged co-operative bank if the whole of the amount of such loss or unabsorbed depreciation is directly relatable to the undertakings transferred to the resulting co-operative bank; or
(ii) the amount which bears the same proportion to the accumulated loss or unabsorbed depreciation of the demerged co-operative bank as the assets of the undertaking transferred to the resulting co-operative bank bears to the assets of the demerged co-operative bank if such accumulated loss or unabsorbed depreciation is not directly relatable to the undertakings transferred to the resulting co-operative bank.
(4) The Central Government may, for the purposes of this section, by notification in the Official Gazette, specify such other conditions as it considers necessary, other than those prescribed under sub-clause (iii) of clause (b) of sub-section (2), to ensure that the business reorganisation is for genuine business purposes.
(5) The period commencing from the beginning of the previous year and ending on the date immediately preceding the date of business reorganisation, and the period commencing from the date of such business reorganisation and ending with the previous year shall be deemed to be two different previous years for the purposes of set off and carry forward of loss and allowance for depreciation.
(6) In a case where the conditions specified in sub-section (2) or notified under sub-section (4) are not complied with, the set off of accumulated loss or unabsorbed depreciation allowed in any previous year to the successor co-operative bank shall be deemed to be the income of the successor co-operative bank chargeable to tax for the year in which the conditions are not complied with.
(7) For the purposes of this section,—
(a) “accumulated loss” means so much of loss of the amalgamating co-operative bank or the demerged co-operative bank, as the case may be, under the head “Profits and gains of business or profession” (not being a loss sustained in a speculation business) which such amalgamating co-operative bank or the demerged co-operative bank, would have been entitled to carry forward and set-off under the provisions of section 72 as if the business reorganisation had not taken place;
(b) “unabsorbed depreciation” means so much of the allowance for depreciation of the amalgamating co-operative bank or the demerged co-operative bank, as the case may be, which remains to be allowed and which would have been allowed to such bank as if the business reorganisation had not taken place;
(c) the expressions “amalgamated co-operative bank”, “amalgamating co-operative bank”, “amalgamation”, “business reorganisation”, “co-operative bank”, “demerged co-operative bank”, “demerger”, “predecessor co-operative bank”, “successor co-operative bank” and “resulting co-operative bank” shall have the meanings respectively assigned to them in section 44DB.]
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Section 73: Losses in speculation business.
- 39 (1) Any loss, computed in respect of a speculation business carried on40 by the assessee, shall not be set off except against profits and gains, if any, of another speculation business.
(2) Where for any40 assessment year any loss computed in respect of a speculation business has not been wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no income from any other speculation business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(i) it shall be set off against the profits and gains, if any, of any speculation business carried on by him assessable for that assessment year; and
(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.
(3) In respect of allowance on account of depreciation or capital expenditure on scientific research, the provisions of sub-section (2) of section 72 shall apply in relation to speculation business as they apply in relation to any other business.
(4) No loss shall be carried forward under this section for more than 41[four] assessment years immediately succeeding the assessment year for which the loss was first computed.
42[Explanation.—Where any part of the business of a company (43[other than a company whose gross total income consists mainly of income which is chargeable under the heads “Interest on securities”, “Income from house property”, “Capital gains” and “Income from other sources” ], or a company 43a[the principal business of which is the business of banking] or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a speculation business44 to the extent to which the business consists of the purchase and sale of such shares.]
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Section 73A: 45[Carry forward and set off of losses by specified business.
- (1) Any loss, computed in respect of any specified business referred to in section 35AD shall not be set off except against profits and gains, if any, of any other specified business.
(2) Where for any assessment year any loss computed in respect of the specified business referred to in sub-section (1) has not been wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee has no income from any other specified business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(i) it shall be set off against the profits and gains, if any, of any specified business carried on by him assessable for that assessment year; and
(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.]
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Section 74: 46[Losses under the head “Capital gains” .
- 47[(1) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss to the assessee, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(a) in so far as such loss relates to a short-term capital asset, it shall be set off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset;
(b) in so far as such loss relates to a long-term capital asset, it shall be set off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset not being a short-term capital asset;
(c) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.]
(2) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.
(3) 48[Omitted by the Finance Act, 2002, w.e.f. 1-4-2003.]]
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Section 74A: 49[Losses from certain specified sources falling under the head “Income from other sources”.
- (1) 50[* * *]
(2) 51[* * *]
52[(3) 53[* * *] In the case of an assessee, being the owner of horses maintained by him for running in horse races (such horses being hereafter in this sub-section referred to as race horses), 54[the amount of loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year shall not be set off against income, if any, from any source other than the activity of owning and maintaining race horses in that year and] shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and—
(a) it shall be set off against the income, if any, 55[from the activity of own-ing and maintaining race horses] assessable for that assessment year :
Provided that the activity of owning and maintaining race horses is carried on by him in the previous year relevant for that assessment year ; and
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on; so, however, that no portion of the loss shall be carried forward for more than four assessment years immediately succeeding the assessment year for which the loss was first computed.
- —For the purposes of this sub-section—
(a) “amount of loss incurred by the assessee in the activity of owning and maintaining race horses” means—
(i) in a case where the assessee has no income by way of stake money, the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly and exclusively for the purposes of maintaining race horses;
(ii) in a case where the assessee has income by way of stake money, the amount by which such income falls short of the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of maintaining race horses;
(b) “horse race” means a horse race upon which wagering or betting may be lawfully made;
(c) “income by way of stake money” means the gross amount of prize money received on a race horse or race horses by the owner thereof on account of the horse or horses or any one or more of the horses winning or being placed second or in any lower position in horse races.]
Section 75: 56[Losses of firms.
- Where the assessee is a firm, any loss in relation to the assessment year commencing on or before the 1st day of April, 1992, which could not be set off against any other income of the firm and which had been apportioned to a partner of the firm but could not be set off by such partner prior to the assessment year commencing on the 1st day of April, 1993, then, such loss shall be allowed to be set off against the income of the firm subject to the condition that the partner continues in the said firm and to be carried forward for set off under sections 70, 71, 72, 73, 74 and 74A.]
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Section 76: 76. Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.
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Section 77: 77. Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.
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Section 78: Carry forward and set off of losses in case of change in constitution of firm or on succession.
- 57 58[(1) Where a change has occurred in the constitution of a firm, nothing in this Chapter shall entitle the firm to have carried forward and set off so much of the loss proportionate to the share of a retired or deceased partner as exceeds his share of profits, if any, in the firm in respect of the previous year.]
(2) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, nothing in this Chapter shall entitle any person other than the person incurring the loss to have it carried forward and set off against his income.
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Section 79: Carry forward and set off of losses in the case of certain companies.
- Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss59 incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless—
(a) on the last day of the previous year the shares of the company carry-ing not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred 60[* * *] :
61[Provided that nothing contained in this section shall apply to a case where a change in the said voting power takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift :]
62[Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company.]
(b) 63[Omitted by the Finance Act, 1988, w.e.f. 1-4-1989.]
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Section 80: Submission of return for losses.
- Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed 64[in accordance with the provisions of sub-section (3) of section 139], shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) 65[or sub-section (3)] of section 74 66[or sub-section (3) of section 74A].
67[CHAPTER VIA: DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME
Section 80A: Deductions to be made in computing total income.
A.—General
- (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 68[80U].
(2) The aggregate amount of the deductions69 under this Chapter shall not, in any case, exceed the gross total income of the assessee.
70[(3) Where, in computing the total income of an association of persons or a body of individuals, any deduction is admissible under section 80G or section 80GGA 71[or section 80GGC] or section 80HH or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA 72[or section 80-IB] 73[or section 80-IC] 74[or section 80-ID or section 80-IE] or section 80J75 or section 80JJ76, no deduction under the same section shall be made in computing the total income of a member of the association of persons or body of individuals in relation to the share of such member in the income of the association of persons or body of individuals.]
77[(4) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter under the heading “C—Deductions in respect of certain incomes”, where, in the case of an assessee, any amount of profits and gains of an undertaking or unit or enterprise or eligible business is claimed and allowed as a deduction under any of those provisions for any assessment year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed under any other provisions of this Act for such assessment year and shall in no case exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be.
(5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”, no deduction shall be allowed to him thereunder.]
78[(6) Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter under the heading “C—Deductions in respect of certain incomes”, where any goods or services held for the purposes of the undertaking or unit or enterprise or eligible business are transferred to any other business carried on by the assessee or where any goods or services held for the purposes of any other business carried on by the assessee are transferred to the undertaking or unit or enterprise or eligible business and, the consideration, if any, for such transfer as recorded in the accounts of the undertaking or unit or enterprise or eligible business does not correspond to the market value of such goods or services as on the date of the transfer, then, for the purposes of any deduction under this Chapter, the profits and gains of such undertaking or unit or enterprise or eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods or services as on that date.
- —For the purposes of this sub-section, the expression “market value”,—
(i) in relation to any goods or services sold or supplied, means the price that such goods or services would fetch if these were sold by the undertaking or unit or enterprise or eligible business in the open market, subject to statutory or regulatory restrictions, if any;
(ii) in relation to any goods or services acquired, means the price that such goods or services would cost if these were acquired by the undertaking or unit or enterprise or eligible business from the open market, subject to statutory or regulatory restrictions, if any;]
79[(iii) in relation to any goods or services sold, supplied or acquired means the arm’s length price as defined in clause (ii) of section 92F of such goods or services, if it is a specified domestic transaction referred to in section 92BA.]
80[(7) Where a deduction under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes” is claimed and allowed in respect of profits of any of the specified business referred to in clause (c) of sub-section (8) of section 35AD for any assessment year, no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.]
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Section 80AA: Computation of deduction under section 80M.
- 81[Omitted by the Finance Act, 1997, w.e.f. 1-4-1998.]
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Section 80AB: 82[Deductions to be made with reference to the income included in the gross total income.
8380AB. Where any deduction is required to be made or allowed under any section 84[* * *] included in this Chapter under the heading “C.—Deductions in respect of certain incomes” in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.]
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Section 80AC: 85[Deduction not to be allowed unless return furnished.
- Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC 86[or section 80-ID or section 80-IE], no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.]
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Section 80B: 87[Definitions.
- In this Chapter—
(1) 88[* * *]
(2) 89[* * *]
(3) 90[* * *]
(4) 91[* * *]
(5) “gross total income” means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter 92[* * *] 93[* * *];
(6) 94[* * *]
(7) 95[* * *]
(8) 96[* * *]
(9) 97[* * *].]
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Section 80C: 98[Deduction in respect of life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc.
B.—Deductions in respect of certain payments
9980C. 1(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2), as does not exceed 1a[one lakh rupees].
(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the previous year by the assessee—
(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);
(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4):
Provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;
(iii) by way of deduction from the salary payable by or on behalf of the Government to any individual being a sum deducted in accordance with the conditions of his service, for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum so deducted does not exceed one-fifth of the salary;
(iv) as a contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies;
(v) as a contribution to any provident fund set up by the Central Government and notified2 by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of any person specified in sub-section (4);
(vi) as a contribution by an employee to a recognised provident fund;
(vii) as a contribution by an employee to an approved superannuation fund;
(viii) as subscription to any such security of the Central Government or any such deposit scheme as that Government may, by notification in the Official Gazette, specify in this behalf;
(ix) as subscription to any such savings certificate as defined in clause (c) of section 23 of the Government Savings Certificates Act, 1959 (46 of 1959), as the Central Government may, by notification4 in the Official Gazette, specify in this behalf;
(x) as a contribution, in the name of any person specified in sub-section (4), for participation in the Unit-linked Insurance Plan, 1971 (hereafter in this section referred to as the Unit-linked Insurance Plan) specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(xi) as a contribution in the name of any person specified in sub-section (4) for participation in any such unit-linked insurance plan of the LIC Mutual Fund 5[referred to in] clause (23D) of section 10, as the Central Government may, by notification6 in the Official Gazette, specify in this behalf;
(xii) to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification7 in the Official Gazette, specify;
(xiii) as subscription to any units of any Mutual Fund 8[referred to in] clause (23D) of section 10 or from the Administrator or the specified company under any plan formulated in accordance with such scheme as the Central Government may, by notification9 in the Official Gazette, specify in this behalf;
(xiv) as a contribution by an individual to any pension fund set up by any Mutual Fund 10[referred to in] clause (23D) of section 10 or by the Administrator or the specified company, as the Central Government may, by notification11 in the Official Gazette, specify in this behalf;
(xv) as subscription to any such deposit scheme of, or as a contribution to any such pension fund set up by, the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) (hereafter in this section referred to as the National Housing Bank), as the Central Government may, by notification in the Official Gazette, specify12 in this behalf;
(xvi) as subscription to any such deposit scheme of—
(a) a public sector company which is engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or
(b) any authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both,
as the Central Government may, by notification13 in the Official Gazette, specify in this behalf;
(xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,—
(a) to any university, college, school or other educational institution situated within India;
(b) for the purpose of full-time education of any of the persons specified in sub-section (4);
(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—
(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
(c) repayment of the amount borrowed by the assessee from—
(1) the Central Government or any State Government, or
(2) any bank, including a co-operative bank, or
(3) the Life Insurance Corporation, or
(4) the National Housing Bank, or
(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or
(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or
(7) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or
(8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or
(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,
but shall not include any payment towards or by way of—
(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or
(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or
(C) any expenditure in respect of which deduction is allowable under the provisions of section 24;
(xix) as subscription to equity shares or debentures forming part of any eligible issue of capital approved by the Board on an application made by a public company or as subscription to any eligible issue of capital by any public financial institution in the prescribed form14.
- —For the purposes of this clause,—
(i) “eligible issue of capital” means an issue made by a public company formed and registered in India or a public financial institution and the entire proceeds of the issue are utilised wholly and exclusively for the purposes of any business referred to in sub-section (4) of section 80-IA;
(ii) “public company” shall have the meaning assigned to it in section 315 of the Companies Act, 1956 (1 of 1956);
(iii) “public financial institution” shall have the meaning assigned to it in section 4A16 of the Companies Act, 1956 (1 of 1956);
(xx) as subscription to any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board on an application made by such mutual fund in the prescribed form17:
Provided that this clause shall apply if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.
- —For the purposes of this clause “eligible issue of capital” means an issue referred to in clause (i) of the Explanation to clause (xix) of sub-section (2);
18[(xxi) as term deposit—
(a) for a fixed period of not less than five years with a scheduled bank; and
(b) which is in accordance with a scheme19 framed and notified, by the Central Government, in the Official Gazette for the purposes of this clause.
Explanation.—For the purposes of this clause, “scheduled bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), or 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 bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);]
20[(xxii) as subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette21, specify in this behalf;]
22[(xxiii) in an account under the Senior Citizens Savings Scheme Rules, 200423;
(xxiv) as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.]
(3) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an 24[insurance policy, other than a contract for a deferred annuity, issued on or before the 31st day of March, 2012,] as is not in excess of twenty per cent of the actual capital sum assured.
- —In calculating any such actual capital sum assured, no account shall be taken—
(i) of the value of any premiums agreed to be returned, or
(ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.
25[(3A) The provisions of sub-section (2) shall apply only to so much of any premium or other payment made on an insurance policy, other than a contract for a deferred annuity, issued on or after the 1st day of April, 2012 as is not in excess of ten per cent of the actual capital sum assured :
26[Provided that where the policy, issued on or after the 1st day of April, 2013, is for insurance on life of any person, who is—
(a) a person with disability or a person with severe disability as referred to in section 80U, or
(b) suffering from disease or ailment as specified in the rules made under section 80DDB,
the provisions of this sub-section shall have effect as if for the words “ten per cent”, the words “fifteen per cent” had been substituted.]
Explanation.—For the purposes of this sub-section, “actual capital sum assured” in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—
(i) the value of any premium agreed to be returned; or
(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.]
(4) The persons referred to in sub-section (2) shall be the following, namely:—
(a) for the purposes of clauses (i), (v), (x) and (xi) of that sub-section,—
(i) in the case of an individual, the individual, the wife or husband and any child of such individual, and
(ii) in the case of a Hindu undivided family, any member thereof;
(b) for the purposes of clause (ii) of that sub-section, in the case of an individual, the individual, the wife or husband and any child of such individual;
(c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual.
(5) Where, in any previous year, an assessee—
(i) terminates his contract of insurance referred to in clause (i) of sub-section (2), by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—
(a) in case of any single premium policy, within two years after the date of commencement of insurance; or
(b) in any other case, before premiums have been paid for two years; or
(ii) terminates his participation in any unit-linked insurance plan referred to in clause (x) or clause (xi) of sub-section (2), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or
(iii) transfers the house property referred to in clause (xviii) of sub-section (2) before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,
then,—
(a) no deduction shall be allowed to the assessee under sub-section (1) with reference to any of the sums, referred to in clauses (i), (x), (xi) and (xviii) of sub-section (2), paid in such previous year; and
(b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
(6) If any equity shares or debentures, with reference to the cost of which a deduction is allowed under sub-section (1), are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.
- —A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.
27[(6A) If any amount, including interest accrued thereon, is withdrawn by the assessee from his account referred to in clause (xxiii) or clause (xxiv) of sub-section (2), before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year:
Provided that the amount liable to tax shall not include the following amounts, namely:—
(i) any amount of interest, relating to deposits referred to in clause (xxiii) or clause (xxiv) of sub-section (2), which has been included in the total income of the assessee of the previous year or years preceding such previous year; and
(ii) any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.]
(7) For the purposes of this section,—
(a) the insurance, deferred annuity, provident fund and superannuation fund referred to in clauses (i) to (vii);
(b) unit-linked insurance plan and annuity plan referred to in clauses (xii) to (xiiia);
(c) pension fund and subscription to deposit scheme referred to in clauses (xiiic) to (xiva);
(d) amount borrowed for purchase or construction of a residential house referred to in clause (xv),
of sub-section (2) of section 88 shall be eligible for deduction under the corresponding provisions of this section and the deduction shall be allowed in accordance with the provisions of this section.
(8) In this section,—
(i) “Administrator” 28 means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(ii) “contribution” to any fund shall not include any sums in repayment of loan;
(iii) “insurance” shall include—
(a) a policy of insurance on the life of an individual or the spouse or the child of such individual or a member of a Hindu undivided family securing the payment of specified sum on the stipulated date of maturity, if such person is alive on such date notwithstanding that the policy of insurance provides only for the return of premiums paid (with or without any interest thereon) in the event of such person dying before the said stipulated date;
(b) a policy of insurance effected by an individual or a member of a Hindu undivided family for the benefit of a minor with the object of enabling the minor, after he has attained majority to secure insurance on his own life by adopting the policy and on his being alive on a date (after such adoption) specified in the policy in this behalf;
(iv) “Life Insurance Corporation” means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);
(v) “public company” shall have the same meaning as in section 329 of the Companies Act, 1956 (1 of 1956);
(vi) “security” means a Government security as defined in clause (2) of section 230 of the Public Debt Act, 1944 (18 of 1944);
(vii) “specified company” means a company as referred to in clause (h) of section 231 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);
(viii) “transfer” shall be deemed to include also the transactions referred to in clause (f) of section 269UA.]
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Section 80CC: Deduction in respect of investment in certain new shares.
- 32[Omitted by the Finance (No. 2) Act, 1996, w.r.e.f. 1-4-1993.]
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Section 80CCA: 33[Deduction in respect of deposits under National Savings Scheme or payment to a deferred annuity plan.
3480CCA. (1) Where an assessee, being—
(a) an individual, or
(b) a Hindu undivided family, 35[* * *]
(c) 36[* * *]
has in the previous year—
(i) deposited any amount in accordance with such scheme as the Central Government may, by notification37 in the Official Gazette, specify in this behalf 38[* * *]; or
(ii) paid any amount to effect or to keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may, by notification39 in the Official Gazette, specify,
out of his income chargeable to tax, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income of the whole of the amount deposited or paid (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of twenty thousand rupees in the previous year :
40[Provided that in relation to—
(a) the assessment years commencing on the 1st day of April, 1989 and the 1st day of April, 1990, this sub-section shall have effect as if for the words “twenty thousand rupees”, the words “thirty thousand rupees” had been substituted;
(b) the assessment year commencing on the 1st day of April, 1991 and subsequent assessment years, this sub-section shall have effect as if for the words “twenty thousand rupees”, the words “forty thousand rupees” had been substituted:]
41[Provided further that no deduction under this sub-section shall be allowed in relation to any amount deposited or paid under clauses (i) and (ii) on or after the 1st day of April, 1992.]
(2) Where any amount—
(a) standing to the credit of the assessee 42[under the scheme referred to in clause (i) of sub-section (1)] in respect of which a deduction has been allowed under sub-section (1) together with the interest accrued on such amount is withdrawn in whole or in part in any previous year, or
(b) is received on account of the surrender of the policy or as annuity or bonus in accordance with the annuity plan of the Life Insurance Corporation in any previous year,
an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee of that previous year in which such withdrawal is made or, as the case may be, amount is received, and shall, accordingly, be chargeable to tax as the income of that previous year :
43[Provided that nothing contained in this sub-section shall apply to any amount received by the assessee on account of the surrender of the policy in accordance with the terms of the annuity plan of the Life Insurance Corporation where the assessee elects to surrender before the 1st day of October, 1992, the said annuity plan in respect of which he had paid any amount under clause (ii) of sub-section (1) before the 1st day of April, 1992.]
44[(3) Notwithstanding anything contained in any other provision of this Act, where a partition has taken place among the members of a Hindu undivided family or where an association of persons has been dissolved after a deduction has been allowed under sub-section (1), the provisions of sub-section (2) shall apply as if the person in receipt of income referred to therein is the assessee.]
Explanation I.—For the removal of doubts, it is hereby declared that interest on the deposits made 45[under the scheme referred to in clause (i) of sub-section (1)] shall not be chargeable to tax except in the manner and to the extent specified in sub-section (2).
Explanation II.—For the purposes of this section, “Life Insurance Corporation” shall have the same meaning as in clause (a) of sub-section (8) of section 80C.]
November 29, 2014
Section 1. Name and territory of the Union
(1) India, that is Bharat, shall be a Union of States.
1[(2) The States and Territories thereof shall be a specified in the First Schedule.]
(3) The Territory of the India shall comprise-
(a) the Territories of the States;
2[(b) the Union Territories specified in the First Schedule; and
(c) such other Territories as may be acquired;
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, Sec. 2, for clause (2).
2. 1. Subs. by the Constitution (Seventh Amendment) Act, 1956, Sec. 2, for sub-clause (b).
Section 2. Admission or establishment of new States
Parliament may by law admit into the Union, or establish, new States on such terms and conditions as it thinks fit.
Section 2A. Sikkim to be associated with the Union
12A. [Sikkim to be associated with the Union.]
Rep. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 5 (w.e.f. 26-4-1975).
1. Ins. by the Constitution (Thirty-fifth Amendment) Act, 1974, s.2 (w.e.f. 1-3 1975).
Section 3. Formation of new States and alteration of areas, boundaries or names of existing States
Parliament may by law-
(a) Form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State;
(b) Increase the area of any State;
(c) Diminish the area of any State;
(d) Alter the boundaries of any State;
(e) Alter the name of any State:
1[Provided that no Bill for the purpose shall be introduced in either House of Parliament except on the recommendation of the President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States 2***, the Bill has been referred by the President to the Legislature of that State for expressing its views thereon within such period as may be specified in the reference or within such further period as the President may allow and the period so specified or allowed has expired.]
3[Explanation I.
In this article, in clauses (a) to (e), “State” includes a Union territory, but in the proviso, “State” does not include a Union territory.
Explanation II.
The power conferred on Parliament by clause (a) includes the power to form a new State or Union territory by uniting a part of any State or Union territory to any other State or Union territory.]
1. Subs. by the Constitution (Fifth Amendment) Act, 1955, s. 2, for the proviso
2. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
3. Ins. by the Constitution (Eighteenth Amendment) Act, 1966, s. 2.
Section 4. Laws made under articles 2 and 3 to provide for the amendment of the First and the Fourth Schedules and supplemental, incidental and consequential matters
(1) Any law referred to in article 2 or article 3 shall contain such provisions for the amendment of the First Schedule and the Fourth Schedule as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions (including provisions as to representation in Parliament and in the Legislature or Legislatures of the State or States affected by such law) as Parliament may deem necessary.
(2) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.
Section 5. Citizenship at the commencement of the Constitution
At the commencement of this Constitution, every person who has his domicile in the territory of India and-
(a) Who was born in the territory of India; or
(b) Either of whose parents was born in the territory of India; or
(c) Who has been ordinarily resident in the territory of India for not less than five years immediately preceding such commencement, Shall be a citizen of India.
Section 6. Rights of citizenship of certain persons who have migrated to India from Pakistan.
Notwithstanding anything in article 5, a person who has migrated to the territory of India from the territory now included in Pakistan shall be deemed to be a citizen of India at the commencement of this Constitution if-
(a) He or either of his parents or any of his grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted); and
(b) (i) In the case where such person has so migrated before the nineteenth day of July, 1948, he has been ordinarily resident in the territory of India since the date of his migration, or
(ii) In the case where such person has so migrated on or after the nineteenth day of July, 1948, he has been registered as a citizen of India by an officer appointed in that behalf by the Government of the Dominion of India on an application made by him therefor to such officer before the commencement of this Constitution in the form and manner prescribed by that Government:
Provided that no person shall be so registered unless he has been resident in the territory of India for at least six months immediately preceding the date of his application.
(2) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes
Section 7. Rights of citizenship of certain migrants to Pakistan
Notwithstanding anything in articles 5 and 6, a person who has after the first day of March, 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India:
Provided that nothing in this article shall apply to a person who, after having so migrated to the territory now included in Pakistan, has returned to the territory of India under a permit for resettlement or permanent return issued by or under the authority of any law and every such person shall for the purposes of clause (b) of article 6 be deemed to have migrated to the territory of India after the nineteenth day of July, 1948.
Section 8. Rights of citizenship of certain persons of Indian origin residing outside India
Notwithstanding anything in article 5, any person who or either of whose parents or any of whose grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted), and who is ordinarily residing in any country outside India as so defined shall be deemed to be a citizen of India if he has been registered as a citizen of India by the diplomatic or consular representative of India in the country where he is for the time being residing on an application made by him therefor to such diplomatic or consular representative, whether before or after the commencement of this Constitution, in the form and manner prescribed by the Government of the Dominion of India or the Government of India.
Section 9. Persons voluntarily acquiring citizenship of a foreign State not to be citizens
No person shall be a citizen of India by virtue of article 5, or be deemed to be a citizen of India by virtue of article 6 or article 8, if he has voluntarily acquired the citizenship of any foreign State.
Section 10. Continuance of the rights of citizenship
Every person who is or is deemed to be a citizen of India under any of the foregoing provisions of this Part shall, subject to the provisions of any law that may be made by Parliament, continue to be such citizen.
Section 11. Parliament to regulate the right of citizenship by law
Nothing in the foregoing provisions of this Part shall derogate from the power of Parliament to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship
Section 12. Definition
In this Part, unless the context otherwise requires, “the State” includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
Section 13. Laws inconsistent with or in derogation of the fundamental rights
(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.
(2) The State shall not make any law, which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.
(3) In this article, unless the context otherwise requires, -
(a) “Law” includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law;
(b) “Laws in force” includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas.
1[(4) Nothing in this article shall apply to any amendment of this Constitution made under article 368.]
1. Ins. by the Constitution (Twenty-fourth Amendment) Act, 1971, s.2.
Section 14. Equality before law
The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.
Section 15. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth
(1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
(2) No citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of them, be subject to any disability, liability, restriction or condition with regard to-
(a) Access to shops, public restaurants, hotels and places of public entertainment; or
(b) The use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated to the use of the general public.
(3) Nothing in this article shall prevent the State from making any special provision for women and children.
1[(4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.]
1. Added by the Constitution (First Amendment) Act, 1951, s. 2.
Section 16. Equality of opportunity in matters of public employment
(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
(3) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office 1[under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory] prior to such employment or appointment.
(4) Nothing in this article shall prevent the State from making any provision for the reservation of appointment or posts in favour of any backward class of citizen which, in the opinion of the State, is not adequately represented in the services under the State.
2[(4A) Nothing in this article shall prevent the State from making any provision for reservation 4[in matters of promotion to any class] or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State.]
3[(4B) Nothing in this article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent. reservation on total number of vacancies of that year.]
(5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination.
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for “under any State specified in the First Schedule or any local or other authority within its territory, any requirement as to residence within that State”.
2. Ins. by the Constitution (Seventy-seventh Amendment) Act, 1995,s. 2. (w.e.f. 17-6-1995).
3. Ins. by the Constitution (Eighty-first Amendment) Act, 2000, s.2 (w.e.f. 09-06-2000)
4. Subs. by the Constitution (Eighty-fifth Amendment) Act, 2001, sec. 2 (w.r.e.f. 17-6-1995).
Section 17. Abolition of Untouchability
“Untouchability” is abolished and its practice in any form is forbidden. The enforcement of any disability rising out of “Untouchability” shall be an offence punishable in accordance with law.
Section 18. Abolition of titles
(1) No title, not being a military or academic distinction, shall be conferred by the State.
(2) No citizen of India shall accept any title from any foreign State.
(3) No person who is not a citizen of India shall, while he holds any office of profit or trust under the State, accept without the consent of the President any title from any foreign State.
(4) No person holding any office of profit or trust under the State shall, without the consent of the President, accept any present, emolument, or office of any kind from or under any foreign State.
Section 19. Protection of certain rights regarding freedom of speech, etc.
(1) All citizens shall have the right-
(a) To freedom of speech and expression;
(b) To assemble peaceably and without arms;
(c) To form associations or unions;
(d) To move freely throughout the territory of India;
(e) To reside and settle in any part of the territory of India; 1[and]
(f) 2* * * * *
(g) To practise any profession, or to carry on any occupation, trade or business.
3[(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of 4[the sovereignty and integrity of India,] the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.]
(3) Nothing in sub-clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of 4[the sovereignty and integrity of India or] public order, reasonable restrictions on the exercise of the right conferred by the said sub-clause.
(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of 4[the sovereignty and integrity of India or] public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause.
(5) Nothing in 5[sub-clauses (d) and (e)] of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, 6[nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to, -
(i) The professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or
(ii) The carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise].
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 2 (w.e.f. 20-6-1979).
2. Sub-clause (f) omitted by s. 2, Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).
3. Subs. by the Constitution (First Amendment) Act, 1951, s. 3, for cl. (2) (with retrospective effect
4. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, s. 2.
5. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 2, for “sub-clauses (d), (e) and (f)” (w.e.f. 20-6-1979)
6. Subs. by the Constitution (First Amendment) Act, 1951, s. 3, for certain words.
Section 20. Protection in respect of conviction for offences
(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
(2) No person shall be prosecuted and punished for the same offence more than once.
(3) No person accused of any offence shall be compelled to be a witness against himself.
Section 21. Protection of life and personal liberty
No person shall be deprived of his life or personal liberty except according to procedure established by law.
Section 21A. Right to education
1[21A. Right to education.
The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.]
1. Ins. By the Constitution (Eighty-sixth Amendment) Act, 2002.
22. Protection against arrest and detention in certain cases
122. Protection against arrest and detention in certain cases.
(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice.
(2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate.
(3) Nothing in clauses (1) and (2) shall apply-
(a) To any person who for the time being is an enemy alien; or
(b) To any person who is arrested or detained under any law providing for preventive detention.
(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless-
(a) An Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court has reported before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention:
Provided that nothing in this sub-clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by Parliament under sub-clause (b) of clause (7); or
(b) Such person is detained in accordance with the provisions of any law made by Parliament under sub-clauses (a) and (b) of clause (7).
(5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
(6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose.
(7) Parliament may by law prescribe-
(a) The circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of sub-clause (a) of clause (4);
(b) The maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention; and
(c) The procedure to be followed by an Advisory Board in an inquiry under sub-clause (a) of clause (4).
1. On the enforcement of s. 3 of the Constitution (Forty-fourth Amendment) Act, 1978, art. 22 shall stand amended as directed in s. 3 of that Act. For the text of s. 3 of that Act, see Appendix III.
Section 23. Prohibition of traffic in human beings and forced labour
(1) Traffic in human beings and begar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.
(2) Nothing in this article shall prevent the State from imposing compulsory service for public purposes, and in imposing such service the State shall not make any discrimination on grounds only of religion, race, caste or class or any of them.
Section 24. Prohibition of employment of children in factories, etc.
No child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.
Section 25. Freedom of conscience and free profession, practice and propagation of religion.
(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practise and propagate religion.
(2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law-
(a) Regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice;
(b) Providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.
Explanation I. The wearing and carrying of kirpans shall be deemed to be included in the profession of the Sikh religion.
Explanation II. In sub-clause (b) of clause (2), the reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion, and the reference to Hindu religious institutions shall be construed accordingly.
Section 26. Freedom to manage religious affairs.
Subject to public order, morality and health, every religious denomination or any section thereof shall have the right-
(a) To establish and maintain institutions for religious and charitable purposes;
(b) To manage its own affairs in matters of religion;
(c) To own and acquire movable and immovable property; and
(d) To administer such property in accordance with law.
Section 27. Freedom as to payment of taxes for promotion of any particular religion
No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination.
Section 28. Freedom as to attendance at religious instruction or religious worship in certain educational institutions
(1) No religious instruction shall be provided in any educational institution wholly maintained out of State funds.
(2) Nothing in clause (1) shall apply to an educational institution, which is administered by the State but has been established under any endowment or trust which requires that religious instruction shall be imparted in such institution.
(3) No person attending any educational institution recognised by the State or receiving aid out of State funds shall be required to take part in any religious instruction that may be imparted in such institution or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto.
Section 29. Protection of interests of minorities
(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.
(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
Section 30. Right of minorities to establish and administer educational institutions
(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
1[(1A) In making any law providing for the compulsory acquisition of any property of any educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.]
(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language 2[* * *]
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 4 (w.e.f. 20-6-1979).
2. The sub-heading “Right to Property” omitted by s. 5, Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).
Section 31. Compulsory acquisition of property
Rep. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 6 (w.e.f. 20-6-1979).
Section 31A. Saving of laws providing for acquisition of estates, etc.
1[Saving of Certain Laws]
2[31A. Saving of laws providing for acquisition of estates, etc.
3[(1) Notwithstanding anything contained in article 13, no law providing for-
(a) The acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or
(b) The taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or
(c) The amalgamation of two or more corporations either in the public interest or in order to secure the proper management of any of the corporations, or
(d) The extinguishment or modification of any rights of managing agents, secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting rights of shareholders thereof, or
(e) The extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by 4[article 14 or article 19]:
Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent:]
5[Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.]
(2) In this article, -
6[(a) The expression “estate” shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include-
(i) Any jagir, inam or muafi or other similar grant and in the States of 7[Tamil Nadu] and Kerala, any janmam right;
(ii) Any land held under ryotwari settlement;
(iii) Any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;]
(b) The expression “rights”, in relation to an estate, shall include any rights vesting in a proprietor, sub-proprietor, under-proprietor, tenure-holder, 8[raiyat, under-raiyat] or other intermediary and any rights or privileges in respect of land revenue.]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 3 (w.e.f. 3-1-1977).
2. Ins. by the Constitution (First Amendment) Act, 1951, s. 4 (with retrospective effect).
3. Subs. by the Constitution (Fourth Amendment) Act, 1955, s. 3, for cl. (1) (with retrospective effect).
4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 7, for “article 14, article 19 or article 31″ (w.e.f. 20-6-1979).
5. Ins. by the Constitution (Seventeenth Amendment) Act, 1964, s. 2.
6. Subs. by s. 2, the Constitution (Seventeenth Amendment) Act, 1964, for sub-clause (a) (with retrospective effect).
7. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 4, for “Madras” (w.e.f. 14-1-1969).
8. Ins. by the Constitution (Fourth Amendment) Act, 1955, s. 3 (with retrospective effect).
Section 31B. Validation of certain Acts and Regulations
1[31B. Validation of certain Acts and Regulations.
Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or Tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.]
1. Ins. by the Constitution (First Amendment) Act, 1951, s. 5. (w.e.f. 8-6-1951)
Section 31C. Saving of laws giving effect to certain directive principles
1[31C. Saving of laws giving effect to certain directive principles.
Notwithstanding anything contained in article 13, no law giving effect to the policy of the State towards securing 2[all or any of the principles laid down in Part IV] shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by 3[article 14 or article 19]; 4[and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy:
Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.]
1. Ins. by the Constitution (Twenty-fifth Amendment) Act, 1971, s.3 (w.e.f. 20-4-1972).
2. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 4, for “the principles specified in clause (b) or clause (c) of article 39″ (w.e.f. 3-1-1977). Section 4 has been declared invalid by the Supreme Court in Minerva Mills Ltd. and Others Vs. Union of India and Others (1980) 2. S.C.C. 591.
3. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 8, for “article 14, article 19 or article 31″ (w.e.f. 20-6-1979).
4. In Kesavananda Bharati Vs. The State of Kerala, (1973) Supp. S.C.R.1, the Supreme Court held the provision in italics to be invalid.
Section 31D. Saving of laws in respect of anti-national activities
1[31D. [Saving of laws in respect of anti-national activities.]
Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 2 (w.e.f. 13-4-1978).
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 5 (w.e.f. 3-1-1977).
Section 32. Remedies for enforcement of rights conferred by this Part
(1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.
(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of
(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).
(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.
Section 32A. Constitutional validity of State laws not to be considered in proceedings under article 32
1[32A. [Constitutional validity of State laws not to be considered in proceedings under article 32.]
Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 3 (w.e.f. 13-4-1978).
1. Ins. by s. 6, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 1-2-1977).
Section 33. Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.
1[33. Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.
Parliament may, by law, determine to what extent any of the rights conferred by this Part shall, in their application to, -
(a) The members of the Armed Forces; or
(b) The members of the Forces charged with the maintenance of public order; or
(c) Persons employed in any bureau or other organisation established by the State for purposes of intelligence or counter intelligence; or
(d) Persons employed in, or in connection with, the telecommunication systems set up for the purposes of any Force, bureau or organisation referred to in clauses (a) to (c),
be restricted or abrogated so as to ensure the proper discharge of their duties and the maintenance of discipline among them.]
1. Subs. by the Constitution (Fiftieth Amendment) Act, 1984, s. 2, for art. 33(w.e.f.11-9-1984).
Section 34. Restriction on rights conferred by this Part while martial law is in force in any area
Notwithstanding anything in the foregoing provisions of this Part, Parliament may by law indemnify any person in the service of the Union or of a State or any other person in respect of any act done by him in connection with the maintenance or restoration of order in any area within the territory of India where martial law was in force or validate any sentence passed, punishment inflicted, forfeiture ordered or other act done under martial law in such area.
Section 35. Legislation to give effect to the provisions of this Part
Notwithstanding anything in this Constitution, -
(a) Parliament shall have, and the Legislature of a State shall not have, power to make laws-
(i) With respect to any of the matters which under clause (3) of article 16, clause (3) of article 32, article 33 and article 34 may be provided for by law made by Parliament; and
(ii) For prescribing punishment for those acts which are declared to be offences under this Part;
and Parliament shall, as soon as may be after the commencement of this Constitution, make laws for prescribing punishment for the acts referred to in sub-clause (ii);
(b) any law in force immediately before the commencement of this Constitution in the territory of India with respect to any of the matters referred to in sub-clause (i) of clause (a) or providing for punishment for any act referred to in sub-clause (ii) of that clause shall, subject to the terms thereof and to any adaptations and modifications that may be made therein under article 372, continue in force until altered or repealed or amended by Parliament.
In this article, the expression “law in force” has the same meaning as in article 372.
Section 36. Definition
In this Part, unless the context otherwise requires, “the State” has the same meaning as in Part III.
Section 37. Application of the principles contained in this Part
The provisions contained in this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws.
Section 38. State to secure a social order for the promotion of welfare of the people
1[(1)] The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
2[(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.]
1. Art. 38 renumbered as cl. (1) thereof by the Constitution (Forty-fourth Amendment) Act, 1978, s. 9 (w.e.f. 20-6-1979).
2. Ins. by s. 9, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).
Section 39. Certain principles of policy to be followed by the State
The State shall, in particular, direct its policy towards securing-
(a) That the citizens, men and women equally, have the right to an adequate means of livelihood;
(b) That the ownership and control of the material resources of the community are so distributed as best to subserve the common good;
(c) That the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
(d) That there is equal pay for equal work for both men and women;
(e) That the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength
1[(f) That children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.]
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 7, for cl. (f) (w.e.f. 3-1-1977).
Section 39A. Equal justice and free legal aid
1[39A. Equal justice and free legal aid.
The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.]
1. Ins. by s. 8, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).
Section 40. Organisation of village panchayats
The State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.
Section 41. Right to work, to education and to public assistance in certain cases
The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.
Section 42. Provision for just and humane conditions of work and maternity relief
The State shall make provision for securing just and humane conditions of work and for maternity relief
Section 43. Living wage, etc., for workers
The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.
Section 43A. Participation of workers in management of industries
1[Participation of workers in management of industries.
The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.]
1. Ins. by the Constitution (Forty-second Amendment) Act,1976, sec.9 (w.e.f.3-1-1977).
Section 44. Uniform civil code for the citizens
The State shall endeavour to secure for the citizens a uniform civil code throughout the territory of India.
Section 45. Provision for early childhood care and education to children below the age of six years
1[45. Provision for early childhood care and education to children below the age of six years.
The State shall endeavours to provide early childhood care and education for all children until they complete the age of six years.]
1. Subs. by the Constitution (Eighty-sixth Amendment) Act, 2002 for “45. Provision for free and compulsory education for children.- The State shall endeavour to provide, within a period of ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years.”
Section 46. Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections
The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation
Section 47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health
The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.
Section 48. Organisation of agriculture and animal husbandry
The State shall endeavour to organise agriculture and animal husbandry on modern and scientific lines and shall, in particular, take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle
Section 48A. Protection and improvement of environment and safeguarding of forests and wild life
1[Protection and improvement of environment and safeguarding of forests and wild life.
The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976,sec. 10 (w.e.f. 3-1-1977).
Section 49. Protection of monuments and places and objects of national importance
It shall be the obligation of the State to protect every monument or place or object of artistic or historic interest, 1[declared by or under law made by Parliament] to be of national importance, from spoliation, disfigurement, destruction, removal, disposal or export, as the case may be.
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 27, for “declared by Parliament by law”.
Section 50. Separation of judiciary from executive
The State shall take steps to separate the judiciary from the executive in the public services of the State.
Section 51. Promotion of international peace and security
The State shall endeavour to- (a) promote international peace and security; (b) maintain just and honourable relations between nations; (c) foster respect for international law and treaty obligations in the dealings of organised peoples with one another; and (d) encourage settlement of international disputes by arbitration.
Section 51A. Fundamental Duties
1[PART IV-A
FUNDAMENTAL DUTIES
It shall be the duty of every citizens of India-
(a) To abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem;
(b) To cherish and follow the noble ideals which inspired our national struggle for freedom;
(c) To uphold and protect the sovereignty, unity and integrity of India;
(d) To defend the country and render national service when called upon to do so;
(e) To promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women;
(f) To value and preserve the rich heritage of our composite culture;
(g) To protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures;
(h) To develop the scientific temper, humanism and the spirit of inquiry and reform;
(i) To safeguard public property and to abjure violence;
(j) To strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement.]
2[(k) who is a parent or guardian to provide opportunities for education to his child or, as the case may be, ward between the age of six and fourteen years]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 11 (w.e.f. 3-1-1977).
2. Ins. By the Constitution (Eighty-sixth Amendment) Act, 2002.
Section 52. The President of India
There shall be a President of India.
Section 53. Executive power of the Union
(1) The executive power of the Union shall be vested in the President and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.
(2) Without prejudice to the generality of the foregoing provision, the supreme command of the Defence Forces of the Union shall be vested in the President and the exercise thereof shall be regulated by law.
(3) Nothing in this article shall-
(a) Be deemed to transfer to the President any functions conferred by any existing law on the Government of any State or other authority; or
(b) Prevent Parliament from conferring by law functions on authorities other than the President.
Section 54. Election of President
The President shall be elected by the members of an electoral college consisting of-
(a) The elected members of both Houses of Parliament; and
(b) The elected members of the Legislative Assemblies of the States.
1[Explanation. In this article and in article 55, State includes the National Capital Territory of Delhi and the Union territory of Pondicherry.]
1. Ins. by the Constitution (Seventieth Amendment) Act, 1992, s. 2 (w.e.f. 1-6-1995).
Section 55. Manner of election of President
(1) As far as practicable, there shall be uniformity in the scale of representation of the different States at the election of the President.
(2) For the purpose of securing such uniformity among the States interest as well as parity between the States as a whole and the Union, the number of votes which each elected member of Parliament and of the Legislative Assembly of each State is entitled to cast at such election shall be determined in the following manner: -
(a) Every elected member of the Legislative Assembly of a State shall have as many votes as there are multiples of one thousand in the quotient obtained by dividing the population of the State by the total number of the elected members of the Assembly;
(b) If, after taking the said multiples of one thousand, the remainder is not less than five hundred, then the vote of each member referred to in sub-clause (a) shall be further increased by one;
(c) Each elected member of either House of Parliament shall have such number of votes as may be obtained by dividing the total number of votes assigned to the members of the Legislative Assemblies of the States under sub-clauses (a) and (b) by the total number of the elected members of both Houses of Parliament, fractions exceeding one-half being counted as one and other fractions being disregarded.
(3) The election of the President shall be held in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.
1[Explanation. In this article, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:
Provided that the reference in this Explanation to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 2[2026] have been published, be construed as a reference to the 1971 census.]
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 12, for the Explanation (w.e.f. 3-1-1977).
2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 2, for “2000” (w.e.f. 21-2-2002).
Section 56. Term of office of President
(1) The President shall hold office for a term of five years from the date on which he enters upon his office:
Provided that-
(a) The President may, by writing under his hand addressed to the Vice-President, resign his office;
(b) The President may, for violation of the Constitution, be removed from office by impeachment in the manner provided in article 61;
(c) The President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.
(2) Any resignation addressed to the Vice-President under clause (a) of the proviso to clause (1) shall forthwith be communicated by him to the Speaker of the House of the People.
Section 57. Eligibility for re-election
A person who holds, or who has held, office as President shall, subject to the other provisions of this Constitution, be eligible for re-election to that office.
Section 58. Qualifications for election as President
(1) No person shall be eligible for election as President unless he-
(a) Is a citizen of India?
(b) Has completed the age of thirty-five years, and
(c) Is qualified for election as a member of the House of the People.
(2) A person shall not be eligible for election as President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.
Explanation. For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor 1[***] of any State or is a Minister either for the Union or for any State.
1. The words “or Rajpramukh or Uparajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 59. Conditions of President’s office
(1) The President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as President.
(2) The President shall not hold any other office of profit.
(3) The President shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
(4) The emoluments and allowances of the President shall not be diminished during his term of office.
Section 60. Oath or affirmation by the President
Every President and every person acting as President or discharging the functions of the President shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of India or, in his absence, the senior-most Judge of the Supreme Court available, an oath or affirmation in the following form, that is to say-
“I, A.B., do (swear in the name of God/solemnly affirm) that I will faithfully execute the office of President (or discharge the functions of the President) of India and will to the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of India.”.
Section 61. Procedure for impeachment of the President
(1) When a President is to be impeached for violation of the Constitution, the charge shall be preferred by either House of Parliament.
(2) No such charge shall be preferred unless-
(a) The proposal to prefer such charge is contained in a resolution which has been moved after at least fourteen days’ notice in writing signed by not less than one-fourth of the total number of members of the House has been given of their intention to move the resolution, and
(b) Such resolution has been passed by a majority of not less than two-thirds of the total membership of the House.
(3) When a charge has been so preferred by either House of Parliament, the other House shall investigate the charge or cause the charge to be investigated and the President shall have the right to appear and to be represented at such investigation.
(4) If as a result of the investigation a resolution is passed by a majority of not less than two-thirds of the total membership of the House by which the charge was investigated or caused to be investigated, declaring that the charge preferred against the President has been sustained, such resolution shall have the effect of removing the President from his office as from the date on which the resoultion is so passed.
Section 62. Time of holding election to fill vacancy in the office of President and the term of office of person elected to fill casual vacancy
(1) An election to fill a vacancy caused by the expiration of the term of office of President shall be completed before the expiration of the term.
(2) An election to fill a vacancy in the office of President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after, and in no case later than six months from, the date of occurrence of the vacancy; and the person elected to fill the vacancy shall, subject to the provisions of article 56, be entitled to hold office for the full term of five years from the date on which he enters upon his office.
Section 63. The Vice-President of India
There shall be a Vice-President of India.
Section 64. The Vice-President to be ex officio Chairman of the Council of States
The Vice-President shall be ex officio Chairman of the Council of States and shall not hold any other office of profit:
Provided that during any period when the Vice-President acts as President or discharges the functions of the President under article 65, he shall not perform the duties of the office of Chairman of the Council of States and shall not be entitled to any salary or allowance payable to the Chairman of the Council of States under article 97.
Section 65. The Vice-President to act as President or to discharge his functions during casual vacancies in the office, or during the absence, of President
(1) In the event of the occurrence of any vacancy in the office of the President by reason of his death, resignation or removal, or otherwise, the Vice-President shall act as President until the date on which a new President elected in accordance with the provisions of this Chapter to fill such vacancy enters upon his office.
(2) When the President is unable to discharge his functions owing to absence, illness or any other cause, the Vice-President shall discharge his functions until the date on which the President resumes his duties.
(3) The Vice-President shall, during, and in respect of, the period while he is so acting as, or discharging the functions of, President, have all the powers and immunities of the President and be entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
Section 66. Election of Vice-President
(1) The Vice-President shall be elected by the 1[members of an electoral college consisting of the members of both Houses of Parliament] in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.
(2) The Vice-President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected Vice-President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Vice-President.
(3) No person shall be eligible for election as Vice-President unless he-
(a) Is a citizen of India?
(b) Has completed the age of thirty-five years; and
(c) Is qualified for election as a member of the Council of States.
(4) A person shall not be eligible for election as Vice-President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.
Explanation. For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor 2[***] of any State or is a Minister either for the Union or for any State.
1. Subs. by the Constitution (Eleventh Amendment) Act, 1961, s. 2, for “members of both Houses of Parliament assembled at a joint meeting”.
2. The words “or Rajpramukh or Uparajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 67. Term of office of Vice-President
The Vice-President shall hold office for a term of five years from the date on which he enters upon his office:
Provided that-
(a) A Vice-President may, by writing under his hand addressed to the President, resign his office;
(b) A Vice-President may be removed from his office by a resolution of the Council of States passed by a majority of all the then members of the Council and agreed to by the House of the People; but no resolution for the purpose of this clause shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution;
(c) A Vice-President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.
Section 68. Time of holding election to fill vacancy in the office of Vice-President and the term of office of person elected to fill casual vacancy
(1) An election to fill a vacancy caused by the expiration of the term of office of Vice-President shall be completed before the expiration of the term.
(2) An election to fill a vacancy in the office of Vice-President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after the occurrence of the vacancy, and the person elected to fill the vacancy shall, subject to the provisions of article 67, be entitled to hold office for the full term of five years from the date on which he enters upon his office.
Section 69. Oath or affirmation by the Vice-President
Every Vice-President shall, before entering upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation in the following form, that is to say-
“I, A.B., do (swear in the name of God/solemnly affirm) that I will bear true faith and allegiance to the Constitution of India as by law established and that I will faithfully discharge the duty upon which I am about to enter.”.
Section 70. Discharge of President’s functions in other contingencies
Parliament may make such provision as it thinks fit for the discharge of the functions of the President in any contingency not provided for in this Chapter.
Section 71. Matters relating to, or connected with, the election of a President or Vice-President
1[71. Matters relating to, or connected with, the election of a President or Vice-President.
(1) All doubts and disputes arising out of or in connection with the election of a President or Vice-President shall be inquired into and decided by the Supreme Court whose decision shall be final.
(2) If the election of a person as President or Vice-President is declared void by the Supreme Court, acts done by him in the exercise and performance of the powers and duties of the office of President or Vice-President, as the case may be, on or before the date of the decision of the Supreme Court shall not be invalidated by reason of that declaration.
(3) Subject to the provisions of this Constitution, Parliament may by law regulate any matter relating to or connected with the election of a President or Vice-President.
(4) The election of a person as President or Vice-President shall not be called in question on the ground of the existence of any vacancy for whatever reason among the members of the electoral college electing him.]
1. Art. 71 has been successively subs. by the Constitution (Thirty-ninth Amendment) Act, 1975, s. 2 (w.e.f. 10-8-1975) and the Constitution (Forty-fourth Amendment) Act, 1978, s.10, to read as above (w.e.f. 20-6-1979).
Section 72. Power of President to grant pardons, etc., and to suspend, remit or commute sentences in certain cases
(1) The President shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence-
(a) In all cases where the punishment or sentence is by a Court Martial;
(b) In all cases where the punishment or sentence is for an offence against any law relating to a matter to which the executive power of the Union extends;
(c) In all cases where the sentence is a sentence of death.
(2) Nothing in sub-clause (a) of clause (1) shall affect the power conferred by law on any officer of the Armed Forces of the Union to suspend, remit or commute a sentence passed by a Court Martial.
(3) Nothing in sub-clause (c) of clause (1) shall affect the power to suspend, remit or commute a sentence of death exercisable by the Governor 1[***] of a State under any law for the time being in force.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 73. Extent of executive power of the Union
(1) Subject to the provisions of this Constitution, the executive power of the Union shall extend-
(a) To the matters with respect to which Parliament has power to make laws; and
(b) To the exercise of such rights, authority and jurisdiction as are exercisable by the Government of India by virtue of any treaty or agreement: Provided that the executive power referred to in sub-clause (a) shall not, save as expressly provided in this Constitution or in any law made by Parliament, extend in any State 1[***] to matters with respect to which the Legislature of the State has also power to make laws.
(2) Until otherwise provided by Parliament, a State and any officer or authority of a State may, notwithstanding anything in this article, continue to exercise in matters with respect to which Parliament has power to make laws for that State such executive power or functions as the State or officer or authority thereof could exercise immediately before the commencement of this Constitution.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitutuion (Forty-fourth Amendment) Act, 1978, s. 29 and Sch.
Section 74. Council of Ministers to aid and advise President
1[(1) There shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such advice:]
2[Provided that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration.]
(2) The question whether any, and if so what, advice was tendered by Ministers to the President shall not be inquired into in any court.
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 13, for cl.(1) (w.e.f. 3-1-1977).
2. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 11 (w.e.f. 20-6-1979).
Section 75. Other provisions as to Ministers
(1) The Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister.
(2) The Ministers shall hold office during the pleasure of the President.
(3) The Council of Ministers shall be collectively responsible to the House of the People.
(4) Before a Minister enters upon his office, the President shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.
(5) A Minister who for any period of six consecutive months is not a member of either House of Parliament shall at the expiration of that period cease to be a Minister.
(6) The salaries and allowances of Ministers shall be such as Parliament may from time to time by law determine and, until Parliament so determines, shall be as specified in the Second Schedule.
Section 76. Attorney-General for India
(1) The President shall appoint a person who is qualified to be appointed a Judge of the Supreme Court to be Attorney-General for India.
(2) It shall be the duty of the Attorney-General to give advice to the Government of India upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the President, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.
(3) In the performance of his duties the Attorney-General shall have right of audience in all courts in the territory of India.
(4) The Attorney-General shall hold office during the pleasure of the President, and shall receive such remuneration as the President may determine.
Section 77. Conduct of business of the Government of India
(1) All executive action of the Government of India shall be expressed to be taken in the name of the President.
(2) Orders and other instruments made and executed in the name of the President shall be authenticated in such manner as may be specified in rules 1to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.
(3) The President shall make rules for the more convenient transaction of the business of the Government of India, and for the allocation among Ministers of the said business.
2[* * * ]
1. See Notifn. No. S.O. 2297, dated the 3rd November, 1958, Gazette of India, Extraordinary, 1958, Pt.II, s. 3 (ii), p.1315, as amended from time to time.
2. Cl.(4) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 14 (w.e.f. 3-1-1977) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 12 (w.e.f. 20-6-1979).
Section 78. Duties of Prime Minister as respects the furnishing of information to the President, etc.
It shall be the duty of the Prime Minister-
(a) To communicate to the President all decisions of the Council of Ministers relating to the administration of the affairs of the Union and proposals for legislation;
(b) To furnish such information relating to the administration of the affairs of the Union and proposals for legislation as the President may call for; and
(c) If the President so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.
Section 79. Constitution of Parliament
There shall be a Parliament for the Union which shall consist of the President and two Houses to be known respectively as the Council of States and the House of the People.
Section 80. Composition of the Council of States
(1) 1[2[***] The Council of States] shall consist of-
(a) Twelve members to be nominated by the President in accordance with the provisions of clause (3); and
(b) Not more than two hundred and thirty-eight representatives of the States 3[and of the Union territories].
(2) The allocation of seats in the Council of States to be filled by representatives of the States 3[and of the Union territories] shall be in accordance with the provisions in that behalf contained in the Fourth Schedule.
(3) The members to be nominated by the President under sub-clause (a) of clause (1) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely: -
Literature, science, art and social service.
(4) The representatives of each State 4[***] in the Council of States shall be elected by the elected members of the Legislative Assembly of the State in accordance with the system of proportional representation by means of the single transferable vote.
(5) The representatives of the 5[Union territories] in the Council of States shall be chosen in such manner as Parliament may by law prescribe.
1. Subs. by the Constitution (Thirty-fifth Amendment) Act, 1974, s. 3, for “The Council of States” (w.e.f. 1-3-1975).
2. The words “Subject to the provisions of paragraph 4 of the Tenth Schedule,” omitted by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 5 (w.e.f. 26-4-1975).
3. Added by the Constitution (Seventh Amendment) Act, 1956, s. 3.
4. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 3.
5. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 3, for “States specified in Part C of the First Schedule”.
Section 81. Composition of the House of the People
1[81. Composition of the House of the People.
(1) Subject to the provisions of article 331 9[***],] the House of the People shall consist of-
(a) Not more than 2[five hundred and thirty members] chosen by direct election from territorial constituencies in the States, and
(b) Not more than 3[twenty members] to represent the Union territories, chosen in such manner as Parliament may by law provide.
(2) For the purposes of sub-clause (a) of clause (1), -
(a) There shall be allotted to each State a number of seats in the House of the People in such manner that the ratio between that number and the population of the State is, so far as practicable, the same for all States; and
(b) Each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it is, so far as practicable, the same throughout the State:
4[Provided that the provisions of sub-clause (a) of this clause shall not be applicable for the purpose of allotment of seats in the House of the People to any State so long as the population of that State does not exceed six millions.]
(3) In this article, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:
5[Provided that the reference in this clause to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 6[2026] have been published, 7[be construed, (i) for the purposes of sub-clause (a) of clause (2) and the proviso to that clause, as a reference to the 1971 census; and
(ii) for the purpose of sub-clause (b) of clause (2) as a reference to the 8[2001] census]]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 4, for arts. 81 and 82.
2. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, “five hundred and twenty-five members” (w.e.f. 30-5-1987).
3. Subs. by the Constitution (Thirty-first Amendment) Act, 1973, s. 2, for “twenty-five members”.
4. Ins. by s. 2, the Constitution (Thirty-first Amendment) Act, 1973
5. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 15 (w.e.f. 3-1-1977).
6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 3, for “2000” (w.e.f. 21-2-2002).
7. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 3, for “be construed as a reference to the 1971 census” (w.e.f. 21-2-2002).
8. Subs. by the Constitution (Eighty-Seventh Amendment) Act, 2003, for the words “1991”
9. The words and figure “and pargraph 4 of th Tenth Schedule” omitted by the Constitution (Thirty-sixth Amendment) Act, 1975, sec. 5 (w.e.f. 26-4-1975).
Section 82. Readjustment after each census
5[Readjustment after each census.
Upon the completion of each census, the allocation of seats in the House of the People to the States and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:
Provided that such readjustment shall not affect representation in the House of the People until the dissolution of the then existing House:]
1[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the House may be held on the basis of the territorial constituencies existing before such readjustment:
Provided also that until the relevant figures for the first census taken after the year 2[2026] have been published, it shall not be necessary to 3[readjust -
(i) the allocation of seats in the House of the People to the States as readjusted on the basis of the 1971 census; and
(ii) the division of each State into territory constituencies as may be readjusted on the basis of the 4[2001] census,
under this article]]
1. Ins. by s. 16, the Constitution (Forty-second Amendment) Act, 1976.
2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 4, for “2000” (w.e.f. 21-2-2002).
3. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 4, for certain words (w.e.f. 21-2-2002).
4. Subs. by the
Constitution (Eighty-Seventh Amendment) Act, 2003, for the words “1991”.
5. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 4, for article 82.
Section 83. Duration of Houses of Parliament
(1) The Council of States shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.
(2) The House of the People, unless sooner dissolved, shall continue for 1[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of 1[five years] shall operate as a dissolution of the House:
Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 13, for “six years” (w.e.f. 20-6-1979). The words “six years” were subs. for the original words “five years” by the Constitution (Forty-second Amendment) Act, 1976, s.17 (w.e.f. 3-1-1977).
Section 84. Qualification for membership of Parliament
A person shall not be qualified to be chosen to fill a seat in Parliament unless he-
1[(a) Is a citizen of India, and makes and subscribes before some person authorized in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]
(b) Is, in the case of a seat in the Council of States, not less than thirty years of age and, in the case of a seat in the House of the People, not less than twenty-five years of age; and
(c) Possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
1. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, s. 3 for cl. (a).
Section 85. Sessions of Parliament, prorogation and dissolution
1[85. Sessions of Parliament, prorogation and dissolution.
(1) The President shall from time to time summon each House of Parliament to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.
(2) The President may from time to time-
(a) Prorogue the House or either House;
(b) Dissolve the House of the People.]
1. Subs. by the Constitution (First Amendment) Act, 1951, s. 6, for art. 85. (w. e. f.18/6/1951)
Section 86. Right of President to address and send messages to Houses
(1) The President may address either House of Parliament or both Houses assembled together, and for that purpose require the attendance of members.
(2) The President may send messages to either House of Parliament, whether with respect to a Bill then pending in Parliament or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.
Section 87. Special address by the President
(1) At the commencement of 1[the first session after each general election to the House of the People and at the commencement of the first session of each year] the President shall address both Houses of Parliament assembled together and inform Parliament of the causes of its summons.
(2) Provision shall be made by the rules regulating the procedure of either House for the allotment of time for discussion of the matters referred to in such address 2[***].
1. Subs. by s. 7, the Constitution (First Amendment) Act, 1951, for “every session”.
2. The words “and for the precedence of such discussion over other business of the House” omitted by the Constitution (First Amendment) Act, 1951, s. 7.
Section 88. Rights of Ministers and Attorney-General as respects Houses
Every Minister and the Attorney-General of India shall have the right to speak in, and otherwise to take part in the proceedings of, either House, any joint sitting of the Houses, and any committee of Parliament of which he may be named a member, but shall not by virtue of this article be entitled to vote.
Section 89. The Chairman and Deputy Chairman of the Council of States.
(1) The Vice-President of India shall be ex officio Chairman of the Council of States.
(2) The Council of States shall, as soon as may be, choose a member of the Council to be Deputy Chairman thereof and, so often as the office of Deputy Chairman becomes vacant, the Council shall choose another member to be Deputy Chairman thereof.
Section 90. Vacation and resignation of, and removal from, the office of Deputy Chairman.
A member holding office as Deputy Chairman of the Council of States-
(a) Shall vacate his office if he ceases to be a member of the Council;
(b) May at any time, by writing under his hand addressed to the Chairman, resign his office; and
(c) May be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council:
Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution.
Section 91. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman.
(1) While the office of Chairman is vacant, or during any period when the Vice-President is acting as, or discharging the functions of, President, the duties of the office shall be performed by the Deputy Chairman, or, if the office of Deputy Chairman is also vacant, by such member of the Council of States as the President may appoint for the purpose.
(2) During the absence of the Chairman from any sitting of the Council of States the Deputy Chairman, or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.
Section 92. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration.
(1) At any sitting of the Council of States, while any resolution for the removal of the Vice-President from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 91 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman, or, as the case may be, the Deputy Chairman, is absent.
(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Council of States while any resolution for the removal of the Vice-President from his office is under consideration in the Council, but, notwithstanding anything in article 100, shall not be entitled to vote at all on such resolution or on any other matter during such proceedings.
Section 93. The Speaker and Deputy Speaker of the House of the People.
The House of the People shall, as soon as may be, choose two members of the House to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the House shall choose another member to be Speaker or Deputy Speaker, as the case may be.
Section 94. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker.
A member holding office as Speaker or Deputy Speaker of the House of the People-
(a) Shall vacate his office if he ceases to be a member of the House of the People;
(b) May at any time, by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and
(c) May be removed from his office by a resolution of the House of the People passed by a majority of all the then members of the House:
Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution:
Provided further that, whenever the House of the People is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the House of the People after the dissolution.
Section 95. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker
(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the House of the People as the President may appoint for the purpose.
(2) During the absence of the Speaker from any sitting of the House of the People the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the House, or, if no such person is present, such other person as may be determined by the House, shall act as Speaker.
Section 96. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration
(1) At any sitting of the House of the People, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 95 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker, or, as the case may be, the Deputy Speaker, is absent.
(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the House of the People while any resolution for his removal from office is under consideration in the House and shall, notwithstanding anything in article 100, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
Section 97. Salaries and allowances of the Chairman and Deputy Chairman and the Speaker and Deputy Speaker
There shall be paid to the Chairman and the Deputy Chairman of the Council of States, and to the Speaker and the Deputy Speaker of the House of the People, such salaries and allowances as may be respectively fixed by Parliament by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule
Section 98. Secretariat of Parliament
(1) Each House of Parliament shall have a separate secretarial staff:
Provided that nothing in this clause shall be construed as preventing the creation of posts common to both Houses of Parliament.
(2) Parliament may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of either House of Parliament.
(3) Until provision is made by Parliament under clause (2), the President may, after consultation with the Speaker of the House of the People or the Chairman of the Council of States, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House of the People or the Council of States, and any rules so made shall have effect subject to the provisions of any law made under the said clause.
Section 99. Oath or affirmation by members
Every member of either House of Parliament shall, before taking his seat, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
Section 100. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum
(1) Save as otherwise provided in this Constitution, all questions at any sitting of either House or joint sitting of the Houses shall be determined by a majority of votes of the members present and voting, other than the Speaker or person acting as Chairman or Speaker. The Chairman or Speaker, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.
(2) Either House of Parliament shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in Parliament shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.
(3) Until Parliament by law otherwise provides, the quorum to constitute a meeting of either House of Parliament shall be one-tenth of the total number of members of the House.
(4) If at any time during a meeting of a House there is no quorum, it shall be the duty of the Chairman or Speaker, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.
Section 101. Vacation of seats
(1) No person shall be a member of both Houses of Parliament and provision shall be made by Parliament by law for the vacation by a person who is chosen a member of both Houses of his seat in one House or the other.
(2) No person shall be a member both of Parliament and of a House of the Legislature of a State 1[***], and if a person is chosen a member both of Parliament and of a House of the Legislature of 2[a State], then, at the expiration of such period as may be specified in rules 3made by the President, that person’s seat in Parliament shall become vacant, unless he has previously resigned his seat in the Legislature of the State.
(3) If a member of either House of Parliament-
(a) Becomes subject to any of the disqualifications mentioned in 4[clause (1) or clause (2) of article 102], or
5[(b) Resigns his seat by writing under his hand addressed to the Chairman or the Speaker, as the case may be, and his resignation is accepted by the Chairman or the Speaker, as the case may be,] his seat shall thereupon become vacant:
6[Provided that in the case of any resignation referred to in sub-clause (b), if from information received or otherwise and after making such inquiry as he thinks fit, the Chairman or the Speaker, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]
(4) If for a period of sixty days a member of either House of Parliament is without permission of the House absent from all meetings thereof, the House may declare his seat vacant: Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “such a State”.
3. See the Prohibition of Simultaneous Membership Rules, 1950, published with the Ministry of Law Notification No. F.46/50-C, dated the 26th January, 1950, Gazette of India, Extraordinary, p.678
4. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 2, for “clause (1) of article 102″ (w.e.f. 1-3-1985).
5. Subs. by the Constitution (Thirty-third Amendment) Act, 1974, s. 2, for sub-clause (b).
6. Ins. by s. 2, the Constitution (Thirty-third Amendment) Act, 1974.
Section 102. Disqualifications for membership
(1) A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament-
(a) If he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder;
(b) If he is of unsound mind and stands so declared by a competent court;
(c) If he is an undischarged insolvent;
(d) If he is not a citizen of India or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;
(e) If he is so disqualified by or under any law made by Parliament.
1[Explanation. For the purposes of this clause] a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State by reason only that he is a Minister either for the Union or for such State.
2[(2) A person shall be disqualified for being a member of either House of Parliament if he is so disqualified under the Tenth Schedule.]
1. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 3 for “(2) For the purposes of this article” (w.e.f. 1-3-1985).
2. Ins. by s. 3, ibid. (w.e.f. 1-3-1985).
Section 103. Decision on questions as to disqualifications of members
1[103. Decision on questions as to disqualifications of members.
(1) If any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in clause (1) of article 102, the question shall be referred for the decision of the President and his decision shall be final.
(2) Before giving any decision on any such question, the President shall obtain the opinion of the Election Commission and shall act according to such opinion.]
1. Art. 103 has been successively subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 20 (w.e.f. 3-1-1977) and the Constitution (Forty-fourth Amendment) Act, 1978, s. 14, to read as above (w.e.f. 20-6-1979).
Section 104. Penalty for sitting and voting before making oath or affirmation under article 99 or when not qualified or when disqualified
If a person sits or votes as a member of either House of Parliament before he has complied with the requirements of article 99, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the Union.
Section 105. Powers, privileges, etc., of the Houses of Parliament and of the members and committees thereof
(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of Parliament, there shall be freedom of speech in Parliament.
(2) No member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of either House of Parliament of any report, paper, votes or proceedings.
(3) In other respects, the powers, privileges and immunities of each House of Parliament, and of the members and the committees of each House, shall be such as may from time to time be defined by Parliament by law, and, until so defined, 1[shall be those of that House and of its members and committees immediately before the coming into force of section 15 of the Constitution (Forty-fourth Amendment) Act, 1978].
(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of Parliament or any committee thereof as they apply in relation to members of Parliament.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 15, for certain words (w.e.f. 20-6-1979).
Section 106. Salaries and allowances of members
Members of either House of Parliament shall be entitled to receive such salaries and allowances as may from time to time be determined by Parliament by law and, until provision in that respect is so made, allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Constituent Assembly of the Dominion of India
Section 107. Provisions as to introduction and passing of Bills
(1) Subject to the provisions of articles 109 and 117 with respect to Money Bills and other financial Bills, a Bill may originate in either House of Parliament.
(2) Subject to the provisions of articles 108 and 109, a Bill shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses, either without amendment or with such amendments only as are agreed to by both Houses.
(3) A Bill pending in Parliament shall not lapse by reason of the prorogation of the Houses.
(4) A Bill pending in the Council of States which has not been passed by the House of the People shall not lapse on a dissolution of the House of the People.
(5) A Bill which is pending in the House of the People, or which having been passed by the House of the People is pending in the Council of States, shall, subject to the provisions of article 108, lapse on a dissolution of the House of the People.
Section 108. Joint sitting of both Houses in certain cases
(1) If after a Bill has been passed by one House and transmitted to the other House-
(a) The Bill is rejected by the other House; or
(b) The Houses have finally disagreed as to the amendments to be made in the Bill; or
(c) More than six months elapse from the date of the reception of the Bill by the other House without the Bill being passed by it, the President may, unless the Bill has elapsed by reason of a dissolution of the House of the People, notify to the Houses by message if they are sitting or by public notification if they are not sitting, his intention to summon them to meet in a joint sitting for the purpose of deliberating and voting on the Bill: Provided that nothing in this clause shall apply to a Money Bill.
(2) In reckoning any such period of six months as is referred to in clause (1), no account shall be taken of any period during which the House referred to in sub-clause (c) of that clause is prorogued or adjourned for more than four consecutive days.
(3) Where the President has under clause (1) notified his intention of summoning the Houses to meet in a joint sitting, neither House shall proceed further with the Bill, but the President may at any time after the date of his notification summon the Houses to meet in a joint sitting for the purpose specified in the notification and, if he does so, the Houses shall meet accordingly.
(4) If at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the purposes of this Constitution to have been passed by both Houses:
Provided that at a joint sitting-
(a) If the Bill, having been passed by one House, has not been passed by the other House with amendments and returned to the House in which it originated, no amendment shall be proposed to the Bill other than such amendments (if any) as are made necessary by the delay in the passage of the Bill;
(b) If the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and such other amendments as are relevant to the matters with respect to which the Houses have not agreed
and the decision of the person presiding as to the amendments which are admissible under this clause shall be final.
(5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that a dissolution of the House of the People has intervened since the President notified his intention to summon the Houses to meet therein.
Section 109. Special procedure in respect of Money Bills
(1) A Money Bill shall not be introduced in the Council of States.
(2) After a Money Bill has been passed by the House of the People it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States.
(3) If the House of the People accepts any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Council of States and accepted by the House of the People.
(4) If the House of the People does not accept any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States.
(5) If a Money Bill passed by the House of the People and transmitted to the Council of States for its recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People.
Section 110. Definition of “Money Bills”
(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely: -
(a) The imposition, abolition, remission, alteration or regulation of any tax;
(b) The regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
(c) The custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) The appropriation of moneys out of the Consolidated Fund of India;
(e) The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) Any matter incidental to any of the matters specified in sub-clauses (a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.
(4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.
Section 111. Assent to Bills
When a Bill has been passed by the Houses of Parliament, it shall be presented to the President, and the President shall declare either that he assents to the Bill, or that he withholds assent therefrom:
Provided that the President may, as soon as possible after the presentation to him of a Bill for assent, return the Bill if it is not a Money Bill to the Houses with a message requesting that they will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message, and when a Bill is so returned, the Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the Houses with or without amendment and presented to the President for assent, the President shall not withhold assent therefrom.
Section 112. Annual financial statement
(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the “annual financial statement”.
(2) The estimates of expenditure embodied in the annual financial statement shall show separately-
(a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and
(b) The sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure.
(3) The following expenditure shall be expenditure charged on the Consolidated Fund of India-
(a) The emoluments and allowances of the President and other expenditure relating to his office;
(b) The salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;
(c) Debt charges for which the Government of India is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;
(d) (i) The salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court;
(ii) The pensions payable to or in respect of Judges of the Federal Court;
(iii) The pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in 1[a Governor’s Province of the Dominion of India];
(e) The salary, allowances and pension payable to or in respect of the Comptroller and Auditor-General of India;
(f) Any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
(g) Any other expenditure declared by this Constitution or by Parliament by law to be so charged.
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for “a Province corresponding to a State specified in Part A of the First Schedule”(w. e. f. 19/10/1956).
Section 113. Procedure in Parliament with respect to estimates
(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of India shall not be submitted to the vote of Parliament, but nothing in this clause shall be construed as preventing the discussion in either House of Parliament of any of those estimates.
(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People, and the House of the People shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the recommendation of the President.
Section 114. Appropriation Bills
(1) As soon as may be after the grants under article 113 have been made by the House of the People, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet-
(a) The grants so made by the House of the People; and
(b) The expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament.
(2) No amendment shall be proposed to any such Bill in either House of Parliament which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.
Section 115. Supplementary, additional or excess grants
(1) The President shall-
(a) If the amount authorised by any law made in accordance with the provisions of article 114 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or
(b) If any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before both the Houses of Parliament another statement showing the estimated amount of that expenditure or cause to be presented to the House of the People a demand for such excess, as the case any be.
(2) The provisions of articles 112, 113 and 114 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or grant.
Section 116. Votes on account, votes of credit and exceptional grants
(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power-
(a) To make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 113 for the voting of such grant and the passing of the law in accordance with the provisions of article 114 in relation to that expenditure;
(b) To make a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
(c) To make an exceptional grant which forms no part of the current service of any financial year; and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made.
(2) The provisions of articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.
Section 117. Specaal provisions as to financial Bills
(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.
Section 118. Rules of procedure
(1) Each House of Parliament may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.
(2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature of the Dominion of India shall have effect in relation to Parliament subject to such modifications and adaptations as may be made therein by the Chairman of the Council of States or the Speaker of the House of the People, as the case may be.
(3) The President, after consultation with the Chairman of the Council of States and the Speaker of the House of the People, may make rules as to the procedure with respect to joint sittings of, and communications between, the two Houses.
(4) At a joint sitting of the two Houses the Speaker of the House of the People, or in his absence such person as may be determined by rules of procedure made under clause (3), shall preside.
Section 119. Regulation by law of procedure in Parliament in relation to financial business
Parliament may, for the purpose of the timely completion of financial business, regulate by law the procedure of, and the conduct of business in, each House of Parliament in relation to any financial matter or to any Bill for the appropriation of moneys out of the Consolidated Fund of India, and, if and so far as any provision of any law so made is inconsistent with any rule made by a House of Parliament under clause (1) of article 118 or with any rule or standing order having effect in relation to Parliament under clause (2) of that article, such provision shall prevail.
Section 120. Language to be used in Parliament
(1) Notwithstanding anything in Part XVII, but subject to the provisions of article 348, business in Parliament shall be transacted in Hindi or in English:
Provided that the Chairman of the Council of States or Speaker of the House of the People, or person acting as such, as the case may be, may permit any member who cannot adequately express himself in Hindi or in English to address the House in his mother-tongue.
(2) Unless Parliament by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words “or in English” were omitted therefrom.
Section 121. Restriction on discussion in Parliament
No discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties except upon a motion for presenting an address to the President praying for the removal of the Judge as hereinafter provided.
Section 122. Courts not to inquire into proceedings of Parliament
(1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.
Section 123. Power of President to promulgate Ordinances during recess of Parliament
(1) If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require.
(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance-
(a) Shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and
(b) May be withdrawn at any time by the President. Explanation.
Where the Houses of Parliament are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.
(3) If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void.
1. Cl. (4) was ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 2 (retrospectively) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 16 (w.e.f. 20-6-1979).
Section 124. Establishment and constitution of Supreme Court
(1) There shall be a Supreme Court of India consisting of a Chief Justice of India and, until Parliament by law prescribes a larger number, of not more than seven1 other Judges.
(2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal after consultation with such of the Judges of the Supreme Court and of the High Courts in the States as the President may deem necessary for the purpose and shall hold office until he attains the age of sixty-five years:
Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of India shall always be consulted:
Provided further that-
(a) A Judge may, by writing under his hand addressed to the President, resign his office;
(b) A Judge may be removed from his office in the manner provided in clause (4).
2[(2A) The age of a Judge of the Supreme Court shall be determined by such authority and in such manner as Parliament may by law provide.]
(3) A person shall not be qualified for appointment as a Judge of the Supreme Court unless he is a citizen of India and-
(a) Has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or
(b) Has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or
(c) Is, in the opinion of the President, a distinguished jurist.
Explanation I. In this clause “High Court” means a High Court which exercises, or which at any time before the commencement of this Constitution exercised, jurisdiction in any part of the territory of India.
Explanation II. In computing for the purpose of this clause the period during which a person has been an advocate, any period during which a person has held judicial office not inferior to that of a district judge after he became an advocate shall be included.
(4) A Judge of the Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.
(5) Parliament may by law regulate the procedure for the presentation of an address and for the investigation and proof of the misbehaviour or incapacity of a Judge under clause (4).
(6) Every person appointed to be a Judge of the Supreme Court shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
(7) No person who has held office as a Judge of the Supreme court shall plead or act in any court or before any authority within the territory of India.
1. Now “twenty-five”, vide the Supreme Court (number of Judges) Amendment Act, 1986 (Act 22 of 1986).
2. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 2.
Section 125. Salaries, etc., of Judges
1[(1) There shall be paid to the Judges of the Supreme Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.]
(2) Every Judge shall be entitled to such privileges and allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such privileges, allowances and rights as are specified in the Second Schedule:
Provided that neither the privileges nor the allowances of a Judge nor his rights in respect of leave of absence or pension shall be varied to his disadvantage after his appointment.
1. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 2, for cl. (1) (w.e.f. 1-4-1986).
Section 126. Appointment of acting Chief Justice
When the office of Chief Justice of India is vacant or when the Chief Justice is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such one of the other Judges of the Court as the President may appoint for the purpose.
Section 127. Appointment of ad hoc, Judges
(1) If at any time there should not be a quorum of the Judges of the Supreme Court available to hold or continue any session of the Court, the Chief Justice of India may, with the previous consent of the President and after consultation with the Chief Justice of the High Court concerned, request in writing the attendance at the sittings of the Court, as an ad hoc Judge, for such period as may be necessary, of a Judge of a High Court duly qualified for appointment as a Judge of the Supreme Court to be designated by the Chief Justice of India.
(2) It shall be the duty of the Judge who has been so designated, in priority to other duties of his office, to attend the sittings of the Supreme Court at the time and for the period for which his attendance is required, and while so attending he shall have all the jurisdiction, powers and privileges, and shall discharge the duties, of a Judge of the Supreme Court.
Section 128. Attendance of retired Judges at sittings of the Supreme Court
Notwithstanding anything in this Chapter, the Chief Justice of India may at any time, with the previous consent of the President, request any person who has held the office of a Judge of the Supreme Court or of the Federal Court 1[or who has held the office of a Judge of a High Court and is duly qualified for appointment as a Judge of the Supreme Court] to sit and act as a Judge of the Supreme Court, and every such person so requested shall, while so sitting and acting, be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that Court:
Provided that nothing in this article shall be deemed to require any such person as aforesaid to sit and act as a Judge of that Court unless he consents so to do.
1. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 3.
Section 129. Supreme Court to be a court of record
The Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
Section 130. Seat of Supreme Court
The Supreme Court shall sit in Delhi or in such other place or places, as the Chief Justice of India may, with the approval of the President, from time to time, appoint.
Section 131. Original jurisdiction of the Supreme Court
Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute-
(a) Between the Government of India and one or more States; or
(b) Between the Government of India and any State or States on one side and one or more other States on the other; or
(c) Between two or more States,
If and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends:
1[Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad or other similar instrument which, having been entered into or executed before the commencement of this Constitution, continues in operation after such commencement, or which provides that the said jurisdiction shall not extend to such a dispute.]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 5, for the proviso.
Section 131A. Exclusive jurisdiction of the Supreme Court in regard to questions as to constitutional validity of Central laws
1[131A. Exclusive jurisdiction of the Supreme Court in regard to questions as to constitutional validity of Central laws.
[Rep. by the Constitution (Forty-third Amendment) Act, 1977 sec. 4 (w.e.f. 13-4-1978).]]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 23 (w.e.f. 1-2-1977).
Section 132. Appellate jurisdiction of Supreme Court in appeals from High Courts in certain cases
(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order of a High Court in the territory of India, whether in a civil, criminal or other proceeding, 1[if the High Court certifies under article 134A] that the case involves a substantial question of law as to the interpretation of this Constitution.
2[* * *]
(3) Where such a certificate is given, 3[***] any party in the case may appeal to the Supreme Court on the ground that any such question as aforesaid has been wrongly decided 3[***].
Explanation. For the purposes of this article, the expression “final order” includes an order deciding an issue, which, if decided in favour of the appellant, would be sufficient for the final disposal of the case.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 17, for “if the High Court certifies” (w.e.f. 1-8-1979).
2. Cl. (2) omitted by s. 17, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).
3. Certain words omitted by s. 17, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).
Section 133. Appellate jurisdiction of Supreme Court in appeals from High Courts in regard to civil matters
1[(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India 2[if the High Court certifies under article 134A-]
(a) That the case involves a substantial question of law of general importance; and
(b) That in the opinion of the High Court the said question needs to be decided by the Supreme Court.]
(2) Notwithstanding anything in article 132, any party appealing to the Supreme Court under clause (1) may urge as one of the grounds in such appeal that a substantial question of law as to the interpretation of this Constitution has been wrongly decided.
(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by law otherwise provides, lie to the Supreme Court from the judgment, decree or final order of one Judge of a High Court.
1. Subs. by the Constitution (Thirtieth Amendment) Act, 1972, s. 2, for cl. (1) (w.e.f. 27-2-1973).
2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 18, for “if the High Court certifies-” (w.e.f. 1-8-1979).
Section 134. Appellate jurisdiction of Supreme Court in regard to criminal matters
(1) An appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India if the High Court-
(a) Has on appeal reversed an order of acquittal of an accused person and sentenced him to death; or
(b) Has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to death; or
(c) 1[certifies under article 134A] that the case is a fit one for appeal to the Supreme Court:
Provided that an appeal under sub-clause (c) shall lie subject to such provisions as may be made in that behalf under clause (1) of article 145 and to such conditions as the High Court may establish or require.
(2) Parliament may by law confer on the Supreme Court any further powers to entertain and hear appeals from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India subject to such conditions and limitations as may be specified in such law.
1. Subs. by s. 19, the Constitution (Forty-fourth Amendment) Act, 1978, for “certifies” (w.e.f. 1-8-1979).
Section 134A. Certificate for appeal to the Supreme Court
1[134A. Certificate for appeal to the Supreme Court .
Every High Court, passing or making a judgment, decree, final order, or sentence, referred to in clause (1) of article 132 or clause (1) of article 133, or clause (1) of article 134, -
(a) May, if it deems fit so to do, on its own motion; and
(b) Shall, if an oral application is made, by or on behalf of the party aggrieved, immediately after the passing or making of such judgment, decree, final order or sentence,
Determine, as soon as may be after such passing or making, the question whether a certificate of the nature referred to in clause (1) of article 132, or clause (1) of article 133 or, as the case may be, sub-clause (c) of clause (1) of article 134, may be given in respect of that case.]
1. Ins. by s. 20, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 1-8-1979).
Section 135. Jurisdiction and powers of the Federal Court under existing law to be exercisable by the Supreme Court
Until Parliament by law otherwise provides, the Supreme Court shall also have jurisdiction and powers with respect to any matter to which the provisions of article 133 or article 134 do not apply if jurisdiction and powers in relation to that matter were exercisable by the Federal Court immediately before the commencement of this Constitution under any existing law.
Section 136. Special leave to appeal by the Supreme Court
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces.
Section 137. Review of judgments or orders by the Supreme Court
Subject to the provisions of any law made by Parliament or any rules made under article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it.
Section 138. Enlargement of the jurisdiction of the Supreme Court
(1) The Supreme Court shall have such further jurisdiction and powers with respect to any of the matters in the Union List as Parliament may by law confer.
(2) The Supreme Court shall have such further jurisdiction and powers with respect to any matter as the Government of India and the Government of any State may by special agreement confer, if Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court.
Section 139. Conferment on the Supreme Court of powers to issue certain writs
Parliament may by law confer on the Supreme Court power to issue directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for any purposes other than those mentioned in clause (2) of article 32.
Section 139A. Transfer of certain cases
1 [139A. Transfer of certain cases.
2 [(1) Where cases involving the same or substantially the same questions of law are pending before the Supreme Court and one or more High Courts or before two or more High Courts and the Supreme Court is satisfied on its own motion or on an application made by the Attorney-General of India or by a party to any such case that such questions are substantial questions of general importance, the Supreme Court may withdraw the case or cases pending before the High Court or the High Courts and dispose of all the cases itself:
Provided that the Supreme Court may after determining the said questions of law return any case so withdrawn together with a copy of its judgment on such questions to the High Court from which the case has been withdrawn, and the High Court shall on receipt thereof, proceed to dispose of the case in conformity with such judgment.]
(2) The Supreme Court may, if it deems it expedient so to do for the ends of justice, transfer any case, appeal or other proceedings pending before any High Court to any other High Court.]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 24 (w.e.f. 1-2-1977).
2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 21, for cl. (1) (w.e.f. 1-8-1979).
Section 140. Ancillary powers of Supreme Court
Parliament may by law make provision for conferring upon the Supreme Court such supplemental powers not inconsistent with any of the provisions of this Constitution as may appear to be necessary or desirable for the purpose of enabling the Court more effectively to exercise the jurisdiction conferred upon it by or under this Constitution.
Section 141. Law declared by Supreme Court to be binding on all courts
The law declared by the Supreme Court shall be binding on all courts within the territory of India.
Section 142. Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.
(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order 1prescribe.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.
1. See the Supreme Court (Decrees and Orders) Enforcement Order, 1954 (C.O. 47).
Section 143. Power of President to consult Supreme Court.
(1) If at any time it appears to the President that a question of law or fact has arisen, or is likely to arise, which is of such a nature and of such public importance that it is expedient to obtain the opinion of the Supreme Court upon it, he may refer the question to that Court for consideration and the Court may, after such hearing as it thinks fit, report to the President its opinion thereon.
(2) The President may, notwithstanding anything in 1[***] the proviso to article 131, refer a dispute of the kind mentioned in the 2[said proviso] to the Supreme Court for opinion and the Supreme Court shall, after such hearing as it thinks fit, report to the President its opinion thereon.
1. The words, brackets and figure “clause (i) of” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “said clause”.
Section 144. Civil and judicial authorities to act in aid of the Supreme Court
All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court.
Section 144A. Special provisions as to disposal of questions relating to constitutional validity of laws
1[144A. Special provisions as to disposal of questions relating to constitutional validity of laws.
[Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 5 (w.e.f. 13-4-1978).
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 25 (w.e.f. 1-2-1977).
Section 145. Rules of Court, etc.
(1) Subject to the provisions of any law made by Parliament, the Supreme Court may from time to time, with the approval of the President, make rules for regulating generally the practice and procedure of the Court including-
(a) Rules as to the persons practising before the Court;
(b) Rules as to the procedure for hearing appeals and other mattters pertaining to appeals including the time within which appeals to the Court are to be entered;
(c) Rules as to the proceedings in the Court for the enforcement of any of the rights conferred by Part III;
1 [(cc) Rules as to the proceedings in the Court under 2[article 139A];]
(d) Rules as to the entertainment of appeals under sub-clause (c) of clause (1) of article 134;
(e) Rules as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review including the time within which applications to the Court for such review are to be entered;
(f) Rules as to the costs of and incidental to any proceedings in the Court and as to the fees to be charged in respect of proceedings therein;
(g) Rules as to the granting of bail;
(h) Rules as to stay of proceedings;
(i) Rules providing for the summary determination of any appeal which appears to the Court to be frivolous or vexatious or brought for the purpose of delay;
(j) Rules as to the procedure for inquiries referred to in clause (1) of article 317.
(2) Subject to the 3 [provisions of 4 [***] clause (3)], rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts.
(3) 5 [4 [***] The minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five:
Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion.
(4) No judgment shall be delivered by the Supreme Court save in open Court, and no report shall be made under article 143 save in accordance with an opinion also delivered in open Court.
(5) No judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case, but nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a dissenting judgment or opinion.
1. Ins. by s. 26, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 1-2-1977).
2. Subs. by the Constitution (Forty-third Amendment) Act, 1977, s. 6, for “articles 131A and 139A” (w.e.f. 13-4-1978).
3. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 26, for “provisions of clause (3)” (w.e.f. 1-2-1977).
4. Certain words omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 6 (w.e.f. 13-4-1978).
5. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 26, for “The minimum number” (w.e.f. 1-2-1977).
Section 146. Officers and servants and the expenses of the Supreme Court
(1) Appointments of officers and servants of the Supreme Court shall be made by the Chief Justice of India or such other Judge or officer of the Court as he may direct:
Provided that the President may by rule require that in such cases as may be specified in the rule, no person not already attached to the Court shall be appointed to any office connected with the Court, save after consultation with the Union Public Service Commission.
(2) Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose:
Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the President.
(3) The administrative expenses of the Supreme Court, including all salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, shall be charged upon the Consolidated Fund of India, and any fees or other moneys taken by the Court shall form part of that Fund.
Section 147. Interpretation
In this Chapter and in Chapter V of Part VI, references to any substantial question of law as to the interpretation of this Constitution shall be construed as including references to any substantial question of law as to the interpretation of the Government of India Act, 1935 (including any enactment amending or supplementing that Act), or of any Order in Council or order made thereunder, or of the Indian Independence Act, 1947, or of any order made thereunder.
Section 148. Comptroller and Auditor-General of India
(1) There shall be a Comptroller and Auditor-General of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court.
(2) Every person appointed to be the Comptroller and Auditor-General of India shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
(3) The salary and other conditions of service of the Comptroller and Auditor-General shall be such as may be determined by Parliament by law and, until they are so determined, shall be as specified in the Second Schedule:
Provided that neither the salary of a Comptroller and Auditor-General nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment.
(4) The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.
(5) Subject to the provisions of this Constitution and of any law made by Parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor-General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor-General.
(6) The administrative expenses of the office of the Comptroller and Auditor-General, including all salaries, allowances and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.
Section 149. Duties and powers of the Comptroller and Auditor-General
The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.
Section 150. Form of accounts of the Union and of the States
1[150. Form of accounts of the Union and of the States.
The accounts of the Union and of the States shall be kept in such form as the President may, 2[on the advice of] the Comptroller and Auditor-General of India, prescribe.]
1. Subs. by s. 27, the Constitution (Forty-second Amendment) Act, 1976, for art. 150 (w.e.f. 1-4-1977).
2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 22, for “after consultation with” (w.e.f. 20-6-1979).
Section 151. Audit reports
(1) The reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.
(2) The reports of the Comptroller and Auditor-General of India relating to the accounts of a State shall be submitted to the Governor 1[***] of the State, who shall cause them to be laid before the Legislature of the State.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 152. Definition
Part VI The State 1[***] Chapter I General
In this Part, unless the context otherwise requires, the expression “State” does not include the State of Jammu and Kashmir.
Section 153. Governors of States
There shall be a Governor for each State:
1[Provided that nothing in this article shall prevent the appointment of the same person as Governor for two or more States.]
1. Added by s. 6, the Constitution (Seventh Amendment) Act, 1956
Section 154. Executive power of State
(1) The executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.
(2) Nothing in this article shall-
(a) Be deemed to transfer to the Governor any functions conferred by any existing law on any other authority; or
(b) Prevent Parliament or the Legislature of the State from conferring by law functions on any authority subordinate to the Governor.
Section 155. Appointment of Governor
The Governor of a State shall be appointed by the President by warrant under his hand and seal.
Section 156. Term of office of Governor
(1) The Governor shall hold office during the pleasure of the President.
(2) The Governor may, by writing under his hand addressed to the President, resign his office.
(3) Subject to the foregoing provisions of this article, a Governor shall hold office for a term of five years from the date on which he enters upon his office:
Provided that a Governor shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.
Section 157. Qualifications for appointment as Governor
No person shall be eligible for appointment as Governor unless he is a citizen of India and has completed the age of thirty-five years.
Section 158. Conditions of Governor’s office
(1) The Governor shall not be a member of either House of Parliament or of a House of the Legislature of any State specified in the First Schedule, and if a member of either House of Parliament or of a House of the Legislature of any such State be appointed Governor, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Governor.
(2) The Governor shall not hold any other office of profit.
(3) The Governor shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
1[(3A) Where the same person is appointed as Governor of two or more States, the emoluments and allowances payable to the Governor shall be allocated among the States in such proportion as the President may by order determine.]
(4) The emoluments and allowances of the Governor shall not be diminished during his term of office.
1. Ins. by s. 7, the Constitution (Seventh Amendment) Act, 1956.
Section 159. Oath or affirmation by the Governor
Every Governor and every person discharging the functions of the Governor shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of the High Court exercising jurisdiction in relation to the State, or, in his absence, the senior most Judge of that Court available, an oath or affirmation in the following form, that is to say-
“I, A. B., do (swear in the name of God/solemnly affirm) that I will faithfully execute the office of Governor (or discharge the functions of the Governor) of ………….(name of the State) and will to the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of …..(name of the State).”
Section 160. Discharge of the functions of the Governor in certain contingencies
The President may make such provision as he thinks fit for the discharge of the functions of the Governor of a State in any contingency not provided for in this Chapter
Section 161. Power of Governor to grant pardons, etc., and to suspend, remit or commute sentences in certain cases
The Governor of a State shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law relating to a matter to which the executive power of the State extends.
Section 162. Extent of executive power of State
Subject to the provisions of this Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws:
Provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made by Parliament upon the Union or authorities thereof.
Section 163. Council of Ministers to aid and advise Governor
(1) There shall be a Council of Ministers with the Chief Minister at the head to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this Constitution required to exercise his functions or any of them in his discretion.
(2) If any question arises whether any matter is or is not a matter as respects which the Governor is by or under this Constitution required to act in his discretion, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in his discretion.
(3) The question whether any, and if so what, advice was tendered by Ministers to the Governor shall not be inquired into in any court.
Section 164. Other provisions as to Ministers
(1) The Chief Minister shall be appointed by the Governor and the other Ministers shall be appointed by the Governor on the advice of the Chief Minster, and the Ministers shall hold office during the pleasure of the Governor:
Provided that in the States of Bihar, Madhya Pradesh and Orissa, there shall be a Minister in charge of tribal welfare who may in addition be in charge of the welfare of the Scheduled Castes and backward classes or any other work.
1(1A) The total number of Ministers, including the Chief Minister, in the Council of Ministers in a State shall not exceed fifteen per cent of the total number of members of the Legislative Assembly of the State.
Provided that the number of Ministers, including the Chief Minister in a State shall not be less than twelve:
Provided further that where the total number of Ministers Including the Chief MInister in the Council of Ministers in any State at the commencement of the Constitution (Ninety-first Amendment) Act, 2003 exceeds the said fifteen per cent or the number specified in the first proviso, as the case may be, then the total number of Ministers in that State shall be brought in conformity with the provisions of this clause within six months from such date as the President may by public notification appoint.
(1B) A member of the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council belonging to any political party who is disqualified for being a member of that house under paragraph 2 of the Tenth Schedule shall also be disqualified to be appointed as a Minister under clause (1) for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or where he contests any election to the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council, as the case may be, before the expiry of such period, till the date on which he is declared elected, whichever is earlier.]
(2) The Council of Ministers shall be collectively responsible to the Legislative Assembly of the State.
(3) Before a Minister enters upon his office, the Governor shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.
(4) A Minister who for any period of six consecutive months is not a member of the Legislature of the State shall at the expiration of that period cease to be a Minister.
(5) The salaries and allowances of Ministers shall be such as the Legislature of the State may from time to time by law determine and, until the Legislature of the State so determines, shall be as specified in the Second Schedule.
1. Ins. by the Constitution (Ninety-first Amendmen) Act, 2003, sec.3 (w.e.f.1/1/2004).
Section 165. Advocate-General for the State
(1) The Governor of each State shall appoint a person who is qualified to be appointed a Judge of a High Court to be Advocate-General for the State.
(2) It shall be the duty of the Advocate-General to give advice to the Government of the State upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the Governor, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.
(3) The Advocate-General shall hold office during the pleasure of the Governor, and shall receive such remuneration as the Governor may determine.
Section 166. Conduct of business of the Government of a State.
(1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor.
(2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor.
(3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion.
1[* * *]
1. Cl. (4) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 28 (w.e.f. 3-1-1977) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 23 (w.e.f. 20-6-1979).
Section 167. Duties of Chief Minister as respects the furnishing of information to Governor, etc.
It shall be the duty of the Chief Minister of each State-
(a) To communicate to the Governor of the State all decisions of the Council of Ministers relating to the administration of the affairs of the State and proposals for legislation;
(b) To furnish such information relating to the administration of the affairs of the State and proposals for legislation as the Governor may call for; and
(c) If the Governor so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.
Section 168. Constitution of Legislatures in States.
(1) For every State there shall be a Legislature which shall consist of the Governor, and-
(a) In the States of 1[***] Bihar, 2[***] 3[4[***] 5[Maharashtra], 6[Karnataka] and 7[***] 8[and Uttar Pradesh, two Houses;
(b) In other States, one House.
(2) Where there are two Houses of the Legislature of a State, one shall be known as the Legislative Council and the other as the Legislative
Assembly, and where there is only one House, it shall be known as the Legislative Assembly.
1. The words “Andhra Pradesh,” omitted by the Andhra Pradesh Legislatve Council Abolition) Act, 1985 (34 of 1985), s. 4 (w.e.f. 1-6-1985).
2. The word “Bombay” omitted by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 20 (w.e.f. 1-5-1960).
3. No date has been appointed under s.8(2) of the Constitution (Seventh Amendment) Act, 1956, for the insertion of the words “Madhaya Pradesh” in this sub-clause.
4. The words “Tamil Nadu,” omitted by the Tamil Nadu Legislative Council (Abolition) Act, 1986 (40 of 1986), s. 4 (w.e.f. 1-11-1986).
5. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 20 (w.e.f. 1-5-1960).
6. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 4, for “Mysore” (w.e.f. 1-11-1973), which was inserted by the Constitution (Seventh Amendment) Act, 1956, s. 8 (1).
7. The word “Punjab”, omitted by the Punjab Legislative Council (Abolition) Act 1969 (46 of 1969), sec.4 (w.e.f.7/1/1970).
8. Subs. by the West Bengal Legislative Council (Abolition) Act, 1969 (20 of 1969), sec.4, for “Uttar Pradesh and West Bengal” (w.e.f. 1/8/1969).
Section 169. Abolition or creation of Legislative Councils in States
(1) Notwithstanding anything in article 168, Parliament may by law provide for the abolition of the Legislative Council of a State having such a Council or for the creation of such a Council in a State having no such Council, if the Legislative Assembly of the State passes a resolution to that effect by a majority of the total membership of the Assembly and by a majority of not less than two-thirds of the members of the Assembly present and voting.
(2) Any law referred to in clause (1) shall contain such provisions for the amendment of this Constitution as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions as Parliament may deem necessary.
(3) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.
Section 170. Composition of the Legislative Assemblies
1[170. Composition of the Legislative Assemblies.
(1) Subject to the provisions of article 333, the Legislative Assembly of each State shall consist of not more than five hundred, and not less than sixty, members chosen by direct election from territorial constituencies in the State.
(2) For the purposes of clause (1), each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the State.
2[Explanation. In this clause, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:
Provided that the reference in this Explanation to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 3[2026] have been published, be construed as a reference to the 4[2001] census.]
(3) Upon the completion of each census, the total number of seats in the Legislative Assembly of each State and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:
Provided that such readjustment shall not affect representation in the Legislative Assembly until the dissolution of the then existing Assembly:]
5[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the Legislative Assembly may be held on the basis of the territorial constituencies existing before such readjustment:
Provided also that until the relevant figures for the first census taken after the year 3[2026] have been published, it shall not be necessary to 6[readjust-
(i) the total number of seats in the Legislative Assembly of each State as readkisted pm the basis of the 1971 census; and
(ii) the division of such State into territorial constituencies as may be readjusted ion the basis of the 7[2001] census,
under this clause.]]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 9, for art. 170.
2. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 29, for the Explanation (w.e.f. 3-1-1977).
3. Subs. by the Constitution (Eighty-fourth Amendment) act, 2001, sec.5, for “2000” (w.e.f. 21/2/2002).
4. Subs. by the Constitution (Eighty-fourth Amendment) act, 2001, sec.5, for “1971” (w.e.f. 21/2/2002) and again subs. by the Constitution (Eighty- seventh Amendment) Act, 2003,for ‘1991’ (w.e.f. 22/6/2003).
5. Ins. by s. 29, the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).
6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 5, for “2000” (w.e.f. 21-2-2002).
7. Subs. by the Constitution (Eighty-Seventh Amendment) Act, 2003, for ‘1991’ (w.e.f. 22/6/2003).
Section 171. Composition of the Legislative Councils
(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed 1[one third] of the total number of members in the Legislative Assembly of that State:
Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.
(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).
(3) Of the total number of members of the Legislative Council of a State-
(a) As nearly as may be, one-third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify;
(b) As nearly as may be, one-twelfth shall be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university;
(c) As nearly as may be, one-twelfth shall be elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament;
(d) As nearly as may be, one-third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly;
(e) The remainder shall be nominated by the Governor in accordance with the provisions of clause (5).
(4) The members to be elected under sub-clauses (a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament, and the elections under the said sub-clauses and under sub-clause (d) of the said clause shall be held in accordance with the system of proportional representation by means of the single transferable vote.
(5) The members to be nominated by the Governor under sub-clause (e) of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely: -
Literature, science, art, co-operative movement and social service.
1. Subs. by the Constitution (Seventh Amendment) Act,1956, sec.10, for “one-fourth”.
Section 172. Duration of State Legislatures
(1) Every Legislative Assembly of every State, unless sooner dissolved, shall continue for 1[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of 1[five years] shall operate as a dissolution of the Assembly:
Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.
(2) he Legislative Council of a State shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 24, for “six years” (w.e.f. 6-9-1979). The words “six years” were subs. for the original words “five years” by the Constitution (Forty-second Amendment) Act, 1976, s. 30 (w.e.f. 3-1-1977).
Section 173. Qualification for membership of the State Legislature
A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he-
1[(a) Is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]
(b) Is, in the case of a seat in the Legislative Assembly, not less than twenty-five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and
(c) Possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
1. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, s. 4, for cl.(a).
Section 174. Sessions of the State Legislature, prorogation and dissolution
1[174. Sessions of the State Legislature, prorogation and dissolution.
(1) The Governor shall from time to time summon the House or each House of the Legislature of the State to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.
(2) The Governor may from time to time-
(a) Prorogue the House or either House;
(b) Dissolve the Legislative Assembly.]
1. Subs. by the Constitution (First Amendment) Act, 1951, s. 8, for art. 174.
Section 175. Right of Governor to address and send messages to the House or Houses
(1) The Governor may address the Legislative Assembly or, in the case of a State having a Legislative Council, either House of the Legislature of the State, or both Houses assembled together, and may for that purpose require the attendance of members.
(2) The Governor may send messages to the House or Houses of the Legislature of the State, whether with respect to a Bill then pending in the Legislature or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.
Section 176. Special address by the Governor
(1) At the commencement of 1[the first session after each general election to the Legislative Assembly and at the commencement of the first session of each year], the Governor shall address the Legislative Assembly or, in the case of a State having a Legislative Council, both Houses assembled together and inform the Legislature of the causes of its summons.
(2) Provision shall be made by the rules regulating the procedure of the House or either House for the allotment of time for discussion of the matters referred to in such address 2[***].
1. Subs. by s. 9, the Constitution (First Amendment) Act, 1951, for “every session”.
2. The words “and for the precedence of such discussion over other business of the House” omitted by s. 9, the Constitution (First Amendment) Act, 1951.
Section 177. Rights of Ministers and Advocate-General as respects the Houses
Every Minister and the Advocate-General for a State shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly of the State or, in the case of a State having a Legislative Council, both Houses, and to speak in, and otherwise to take part in the proceedings of, any committee of the Legislature of which he may be named a member, but shall not, by virtue of this article, be entitled to vote.
Section 178. The Speaker and Deputy Speaker of the Legislative Assembly
Every Legislative Assembly of a State shall, as soon as may be, choose two members of the Assembly to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the Assembly shall choose another member to be Speaker or Deputy Speaker, as the case may be.
Section 179. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker
A member holding office as Speaker or Deputy Speaker of an Assembly-
(a) Shall vacate his office if he ceases to be a member of the Assembly;
(b) May at any time by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and
(c) May be removed from his office by a resolution of the Assembly passed by a majority of all the then members of the Assembly:
Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution:
Provided further that, whenever the Assembly is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the Assembly after the dissolution.
Section 180. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker
(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the Assembly as the Governor may appoint for the purpose.
(2) During the absence of the Speaker from any sitting of the Assembly the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the Assembly, or, if no such person is present, such other person as may be determined by the Assembly, shall act as Speaker
Section 181. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration
(1) At any sitting of the Legislative Assembly, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 180 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker or, as the case may be, the Deputy Speaker, is absent.
(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly while any resolution for his removal from office is under consideration in the Assembly and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
Section 182. The Chairman and Deputy Chairman of the Legislative Council
The Legislative Council of every State having such Council shall, as soon as may be, choose two members of the Council to be respectively Chairman and Deputy Chairman thereof and, so often as the office of Chairman or Deputy Chairman becomes vacant, the Council shall choose another member to be Chairman or Deputy Chairman, as the case may be.
Section 183. Vacation and resignation of, and removal from, the offices of Chairman and Deputy Chairman
A member holding office as Chairman or Deputy Chairman of a Legislative Council-
(a) Shall vacate his office if he ceases to be a member of the Council;
(b) May at any time by writing under his hand addressed, if such member is the Chairman, to the Deputy Chairman, and if such member is the Deputy Chairman, to the Chairman, resign his office; and
(c) May be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council:
Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days’ notice has been given of the intention to move the resolution.
Section 184. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman
(1) While the office of Chairman is vacant, the duties of the office shall be performed by the Deputy Chairman or, if the office of Deputy Chairman is also vacant, by such member of the Council as the Governor may appoint for the purpose.
(2) During the absence of the Chairman from any sitting of the Council the Deputy Chairman or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.
Section 185. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration
(1) At any sitting of the Legislative Council, while any resolution for the removal of the Chairman from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 184 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman or, as the case may be, the Deputy Chairman is absent.
(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Council while any resolution for his removal from office is under consideration in the Council and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
Section 186. Salaries and allowances of the Speaker and Deputy Speaker and the Chairman and Deputy Chairman
There shall be paid to the Speaker and the Deputy Speaker of the Legislative Assembly, and to the Chairman and the Deputy Chairman of the Legislative Council, such salaries and allowances as may be respectively fixed by the Legislature of the State by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule
Section 187. Secretariat of State Legislature
(1) The House or each House of the Legislature of a State shall have a separate secretarial staff:
Provided that nothing in this clause shall, in the case of the Legislature of a State having a Legislative Council, be construed as preventing the creation of posts common to both Houses of such Legislature.
(2) The Legislature of a State may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House or Houses of the Legislature of the State.
(3) Until provision is made by the Legislature of the State under clause (2), the Governor may, after consultation with the Speaker of the Legislative Assembly or the Chairman of the Legislative Council, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the Assembly or the Council, and any rules so made shall have effect subject to the provisions of any law made under the said clause.
Section 188. Oath or affirmation by members
Every member of the Legislative Assembly or the Legislative Council of a State shall, before taking his seat, make and subscribe before the Governor, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
Section 189. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum
(1) Save as otherwise provided in this Constitution, all questions at any sitting of a House of the Legislature of a State shall be determined by a majority of votes of the members present and voting, other than the Speaker or Chairman, or person acting as such.
The Speaker or Chairman, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.
(2) A House of the Legislature of a State shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in the Legislature of a State shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.
(3) Until the Legislature of the State by law otherwise provides, the quorum to constitute a meeting of a House of the Legislature of a State shall be ten members or one-tenth of the total number of members of the House, whichever is greater.
(4) If at any time during a meeting of the Legislative Assembly or the Legislative Council of a State there is no quorum, it shall be the duty of the Speaker or Chairman, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.
Section 190. Vacation of seats
(1) No person shall be a member of both Houses of the Legislature of a State and provision shall be made by the Legislature of the State by law for the vacation by a person who is chosen a member of both Houses of his seat in one house or the other.
(2) No person shall be a member of the Legislatures of two or more States specified in the First Schedule and if a person is chosen a member of the Legislatures of two or more such States, then, at the expiration of such period as may be specified in rules 1made by the President, that person’s seat in the Legislatures of all such States shall become vacant, unless he has previously resigned his seat in the Legislatures of all but one of the States.
(3) If a member of a House of the Legislature of a State.
(a) Becomes a subject to any of the disqualifications mentioned in 2[clause (1) or clause (2) of article 191]; or
3[(b) Resigns his seat by writing under his hand addressed to the speaker or the Chairman, as the case may be, and his resignation is accepted by the Speaker or the Chairman, as the case may be,]
His seat shall thereupon become vacant:
4[Provided that in the case of any resignation referred to in sub-clause (b), if from information received or otherwise and after making such inquiry as he thinks fit, the Speaker or the Chairman, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]
(4) If for a period of sixty days a member of a House of the Legislature of a State is without permission of the House absent from all meetings thereof, the House may declare his seat vacant:
Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.
1. See the Prohibition of Simultaneous Membership Rules, 1950, published with the Ministry of Law Notification No. F.46/50-C, dated the 26th January, 1950, Gazette of India, Extraordinary, p.678
Section 191. Disqualifications for membership.
(1) A person shall be disqualifed for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State-
(a) If he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder;
(b) If he is of unsound mind and stands so declared by a competent court;
(c) If he is an undischarged insolvent;
(d) If he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;
(e) If he is so disqualified by or under any law made by Parliament.
1[Explanation.- For the purposes of this clause], a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State.
2[(2) A person shall be disqualified for being a member of the Legislative Assembly or Legislative Council of a State if he is so disqualified under the Tenth Schedule.]
1. Subs. by the Constitution (Fifty-second Amendment) Act, 1985, s. 5, for “(2) For the purposes of this article” (w.e.f. 1-3-1985).
2. Ins. by s. 5, the Constitution (Fifty-second Amendment) Act, 1985 (w.e.f. 1-3-1985).
Section 192. Decision on questions as to disqualifications of members.
1[192. Decision on questions as to disqualifications of members.
(1) If any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of article 191, the question shall be referred for the decision of the Governor and his decision shall be final.
(2) Before giving any decision on any such question, the Governor shall obtain the opinion of the Election Commission and shall act according to such opinion.]
1. Art. 192 has been successively subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 33 (w.e.f. 3-1-1977) and the Constitution (Forty-fourth Amendment) Act, 1978, s. 25 to read as above (w.e.f. 20-6-1979).
Section 193. Penalty for sitting and voting before making oath or affirmation under article 188 or when not qualified or when disqualified.
If a person sits or votes as a member of the Legislative Assembly or the Legislative Council of a State before he has complied with the requirements of article 188, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament or the Legislature of the State, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the State.
Section 194. Powers, privileges, etc., of the Houses of Legislatures and of the members and committees thereof.
(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of the Legislature, there shall be freedom of speech in the Legislature of every State.
(2) No member of the Legislature of a State shall be liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or proceedings.
(3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law, and, until so defined,1[shall be those of that House and of its members and committees immediately before the coming into force of section 26 of the Constitution (Forty-fourth Amendment) Act, 1978].
(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of the Legislature of a State or any committee thereof as they apply in relation to members of that Legislature.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 26, for certain words (w.e.f. 20-6-1979).
Section 195. Salaries and allowances of members.
Members of the Legislative Assembly and the Legislative Council of a State shall be entitled to receive such salaries and allowances as may from time to time be determined, by the Legislature of the State by law and, until provision in that respect is so made, salaries and allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Legislative Assembly of the corresponding Province.
Section 196. Provisions as to introduction and passing of Bills.
(1) Subject to the provisions of articles 198 and 207 with respect to Money Bills and other financial Bills, a Bill may originate in either House of the Legislature of a State which has a Legislative Council.
(2) Subject to the provisions of articles 197 and articles 198 , a Bill shall not be deemed to have been passed by the Houses of the Legislature of a State having a Legislative Council unless it has been agreed to by both Houses, either without amemdment or with such amendments only as are agreed to by both Houses.
(3) A Bill pending in the Legislature of a State shall not lapse by reason of the prorogation of the House or Houses thereof.
(4) A Bill pending in the Legislative Council of a State which has not been passed by the Legislative Assembly shall not lapse on a dissolution of the Assembly.
(5) A Bill which is pending in the Legislative Assembly of a State, or which having been passed by the Legislative Assembly is pending in the Legislative Council, shall lapse on a dissolution of the Assembly.
Section 197. Restriction on powers of Legislative Council as to Bills other than Money Bills.
(1) If after a Bill has been passed by the Legislative Assembly of a State having a Legislative Council and transmitted to the Legislative Council-
(a) The Bill is rejected by the Council; or
(b) More than three months elapse from the date on which the Bill is laid before the Council without the Bill being passed by it; or
(c) The Bill is passed by the Council with amendments to which the Legislative Assembly does not agree;
The Legislative Assembly may, subject to the rules regulating its procedure, pass the Bill again in the same or in any subsequent session with or without such amendments, if any, as have been made, suggested or agreed to by the Legislative Council and then transmit the Bill as so passed to the Legislative Council.
(2) If after a Bill has been so passed for the second time by the Legislative Assembly and transmitted to the Legislative Council-
(a) The Bill is rejected by the Council; or
(b) More than one month elapses from the date on which the Bill is laid before the Council without the Bill being passed by it; or
(c) The Bill is passed by the Council with amendments to which the Legislative Assembly does not agree;
The Bill shall be deemed to have been passed by the Houses of the Legislature of the State in the form in which it was passed by the Legislative Assembly for the second time with such amendments, if any, as have been made or suggested by the Legislative Council and agreed to by the Legislative Assembly.
(3) Nothing in this article shall apply to a Money Bill.
Section 198. Special procedure in respect of Money Bills.
(1) A Money Bill shall not be introduced in a Legislative Council.
(2) After a Money Bill has been passed by the Legislative Assembly of a State having a Legislative Council, it shall be transmitted to the Legislative Council for its recommendations, and the Legislative Council shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the Legislative Assembly with its recommendations, and the Legislative Assembly may thereupon either accept or reject all or any of the recommendations of the Legislative Council.
(3) If the legislative Assembly accepts any of the recommendations of the Legislative Council, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Legislative Council and accepted by the Legislative Assembly.
(4) If the Legislative Assembly does not accept any of the recommendations of the Legislative Council, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the Legislative Assembly without any of the amendments recommended by the Legislative Council.
(5) If a Money Bill passed by the Legislative Assembly and transmitted to the Legislative Council for its recommendations is not returned to the Legislative Assembly within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the Legislative Assembly.
Section 199. Definition of “Money Bills”.
(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely: -
(a) The imposition, abolition, remission, alteration or regulation of any tax;
(b) The regulation of the borrowing of money or the giving of any gurantee by the State, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the State;
(c) The custody of the Consolidated Fund or the Contingency Fund of the State, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) The appropriation of moneys out of the Consolidated Fund of the State;
(e) The declaring of any expenditure to be expenditure charged on the Consolidated Fund of the State, or the increasing of the amount of any such expenditure;
(f) The receipt of money on account of the Consolidated Fund of the State or the public account of the State or the custody or issue of such money; or
(g) Any matter incidental to any of the matters specified in sub-clauses (a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) If any question arises whether a Bill introduced in the Legislature of a State which has a Legislative Council is a Money Bill or not, the decision of the Speaker of the Legislative Assembly of such State thereon shall be final.
(4) There shall be endorsed on every Money Bill when it is transmitted to the Legislative Council under article 198, and when it is presented to the Governor for assent under article 200, the certificate of the Speaker of the Legislative Assembly signed by him that it is a Money Bill.
Section 200. Assent to Bills.
When a Bill has been passed by the Legislative Assembly of a State or, in the case of a State having a Legislative Council, has been passed by both Houses of the Legislature of the State, it shall be presented to the Governor and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President:
Provided that the Governor may, as soon as possible after the presentation to him of the Bill for assent, return the Bill if it is not a Money Bill together with a message requesting that the House or Houses will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when a Bill is so returned, the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent, the Governor shall not withhold assent therefrom:
Provided further that the Governor shall not assent to, but shall reserve for the consideration of the President, any Bill which in the opinion of the Governor would, if it became law, so derogate from the powers of the High Court as to endanger the position which that Court is by this Constitution designed to fill.
Section 201. Bills reserved for consideration.
When a Bill is reserved by a Governor for the consideration of the President, the President shall declare either that he assents to the Bill or that he withholds assent therefrom:
Provided that, where the Bill is not a Money Bill, the President may direct the Governor to return the Bill to the House or, as the case may be, the Houses of the Legislature of the State together with such a message as is mentioned in the first proviso to article 200 and, when a Bill is so returned, the House or Houses shall reconsider it accordingly within a period of six months from the date of receipt of such message and, if it is again passed by the House or Houses with or without amendment, it shall be presented again to the President for his consideration.
Section 202. Annual financial statement.
(1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this Part referred to as the “annual financial statement”.
(2) The estimates of expenditure embodied in the annual financial statement shall show separately-
(a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of the State; and
(b) The sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State;
And shall distinguish expenditure on revenue account from other expenditure.
(3) The following expenditure shall be expenditure charged on the Consolidated Fund of each State-
(a) The emoluments and allowances of the Governor and other expenditure relating to his office;
(b) The salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman of the Legislative Council;
(c) Debt charges for which the State is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;
(d) Expenditure in respect of the salaries and allowances of Judges of any High Court;
(e) Any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
(f) Any other expenditure declared by this Constitution, or by the Legislature of the State by law, to be so charged.
Section 203. Procedure in Legislature with respect to estimates.
(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of a State shall not be submitted to the vote of the Legislative Assembly, but nothing in this clause shall be construed as preventing the discussion in the Legislature of any of those estimates.
(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly, and the Legislative Assembly shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the recommendation of the Governor.
Section 204. Appropriation Bills.
(1) As soon as may be after the grants under article 203 have been made by the Assembly, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of the State of all moneys required to meet-
(a) The grants so made by the Assembly; and
(b) The expenditure charged on the Consolidated Fund of the State but not exceeding in any case the amount shown in the statement previously laid before the House or Houses.
(2) No amendment shall be proposed to any such Bill in the House or either House of the Legislature of the State which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of the State, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of article 205 and 206, no money shall be withdrawn from the Consolidated Fund of the State except under appropriation made by law passed in accordance with the provisions of this article.
Section 205. Supplementary additional or excess grants.
(1) The Governor shall-
(a) If the amount authorised by any law made in accordance with the provisions of article 204 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or
(b) If any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year,
cause to be laid before the House or the Houses of the Legislature of the State another statement showing the estimated amount of that expenditure or cause to be presented to the Legislative assembly of the State a demand for such excess, as the case may be.
(2) The provisions of articles 202, 203 and 204 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or grant.
Section 206. Votes on account, votes of credit and exceptional grants.
(1) Notwithstanding anything in the foregoing provisions of this Chapter, the Legislative Assembly of a State shall have power-
(a) To make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 203 for the voting of such grant and the passing of the law in accordance with the provisions of article 204 in relation to that expenditure;
(b) To make a grant for meeting an unexpected demand upon the resources of the State when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
(c) To make an exceptional grant which forms no part of the current service of any financial year;
And the Legislature of the State shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of the State for the purposes for which the said grants are made.
(2) The provisions of articles 203 and 204 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure.
Section 207. Special provisions as to financial Bills.
(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 199 shall not be introduced or moved except on the recommendation of the Governor, and a Bill making such provision shall not be introduced in a Legislative Council:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of a State shall not be passed by a House of the Legislature of the State unless the Governor has recommended to that House the consideration of the Bill.
Section 208. Rules of procedure.
(1) A House of the Legislature of a State may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.
(2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature for the corresponding Province shall have effect in relation to the Legislature of the State subject to such modifications and adaptations as may be made therein by the Speaker of the Legislative Assembly, or the Chairman of the Legislative Council, as the case may be.
(3) In a State having a Legislative Council the Governor, after consultation with the Speaker of the Legislative Assembly and the Chairman of the Legislative Council, may make rules as to the procedure with respect to communications between the two Houses.
Section 209. Regulation by law of procedure in the Legislature of the State in relation to financial business.
The Legislature of a State may, for the purpose of the timely completion of financial business, regulate by law the procedure of, and the conduct of business in, the House or Houses of the Legislature of the State in relation to any financial matter or to any Bill for the appropriation of moneys out of the Consolidated Fund of the State, and, if and so far as any provision of any law so made is inconsistent with any rule made by the House or either House of the Legislature of the State under clause (1) of article 208 or with any rule or standing order having effect in relation to the Legislature of the State under clause (2) of that article, such provision shall prevail.
Section 210. Language to be used in the Legislature.
(1) Notwithstanding anything in Part XVII, but subject to the provisions of article 348, business in the Legislature of a State shall be transacted in the official language or languages of the State or in Hindi or in English:
Provided that the Speaker of the Legislative Assembly or Chairman of the Legislative Council, or person acting as such, as the case may be, may permit any member who cannot adequately express himself in any of the languages aforesaid to address the House in his mother-tongue.
(2) Unless the Legislature of the State by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words “or in English” were omitted therefrom:
1[Provided that in relation to the 2[Legislatures of the States of Himachal Pradesh, Manipur, Meghalaya and Tripura] this clause shall have effect as if for the words “fifteen years” occurring therein, the words “twenty-five years” were substituted:]
3[Provided further that in relation to the 4[Legislatures of the States of 5[Arunachal Pradesh, Goa and Mizoram]], this clause shall have effect as if for the words “fifteen years” occurring therein, the words “forty years” were substituted.]
1. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 46 (w.e.f. 25-1-1971).
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for “Legislature of the State of Himachal Pradesh” (w.e.f. 21-1-1972).
3. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 39 (w.e.f. 20-2-1987).
4. `Subs. by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 42, for “Legislature of the State of Mizoram” (w.e.f. 20-2-1987).
5. Subs. by the Goa, Daman and Diu (Reorganisation) Act, 1987 (18 of 1987), s. 63, for “Arunachal Pradesh and Mizoram” (w.e.f. 30-5-1987).
Section 211. Restriction on discussion in the Legislature.
No discussion shall take place in the Legislature of a State with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties.
Section 212. Courts not to inquire into proceedings of the Legislature.
(1) The validity of any proceedings in the Legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of the Legislature of a State in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in the Legislature shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.
Section 213. Power of Governor to promulgate Ordinances during recess of Legislature.
(1) If at any time, except when the Legislative Assembly of a State is in session, or where there is a Legislative Council in a State, except when both Houses of the Legislature are in session, the Governor is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require:
Provided that the Governor shall not, without instructions from the President, promulgate any such Ordinance if-
(a) A Bill containing the same provisions would under this Constitution have required the previous sanction of the President for the introduction thereof into the Legislature; or
(b) He would have deemed it necessary to reserve a Bill containing the same provisions for the consideration of the President; or
(c) An Act of the Legislature of the State containing the same provisions would under this Constitution have been invalid unless, having been reserved for the consideration of the President, it had received the assent of the President.
(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of the Legislature of the State assented to by the Governor, but every such Ordinance-
(a) Shall be laid before the Legislative Assembly of the State, or where there is a Legislative Council in the State, before both the Houses, and shall cease to operate at the expiration of six weeks from the reassembly of the Legislature, or if before the expiration of that period a resolution disapproving it is passed by the Legislative Assembly and agreed to by the Legislative Council, if any, upon the passing of the resolution or, as the case may be, on the resolution being agreed to by the Council; and
(b) May be withdrawn at any time by the Governor.
Explanation. Where the Houses of the Legislature of a State having a Legislative Council are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.
(3) If and so far as an Ordinance under this article makes any provision which would not be valid if enacted in an Act of the Legislature of the State assented to by the Governor, it shall be void:
Provided that, for the purposes of the provisions of this Constitution relating to the effect of an Act of the Legislature of a State which is repugnant to an Act of Parliament or an existing law with respect to a matter enumerated in the Concurrent List, an Ordinance promulgated under this article in pursuance of instructions from the President shall be deemed to be an Act of the Legislature of the State which has been reserved for the consideration of the President and assented to by him.
1. Cl. (4) was ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 3 (retrospectively) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 27 (w.e.f. 20-6-1979).
Section 214. High Courts for States.
1[***] There shall be a High Court for each State.
2[***]
1. The brackets and figure “(1)” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Cls. (2) and (3) omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956
Section 215. High Courts to be courts of record
Every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
Section 216. Constitution of High Courts
Every High Court shall consist of a Chief Justice and such other Judges as the President may from time to time deem it necessary to appoint.
1[***]
1. Proviso omitted by s. 11, the Constitution (Seventh Amendment) Act, 1956.
Section 217. Appointment and conditions of the office of a Judge of a High Court
(1) Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court, and 1[shall hold office, in the case of an additional or acting Judge, as provided in article 224, and in any other case, until he attains the age of 2[sixty-two years]]:
Provided that-
(a) A Judge may, by writing under his hand addressed to the President, resign his office;
(b) A Judge may be removed from his office by the President in the manner provided in clause (4) of article 124 for the removal of a Judge of the Supreme Court;
(c) The office of a Judge shall be vacated by his being appointed by the President to be a Judge of the Supreme Court or by his being transferred by the President to any other High Court within the territory of India.
(2) A person shall not be qualified for appointment as a Judge of a High Court unless he is a citizen of India and-
(a) Has for at least ten years held a judicial office in the territory of India; or
(b) Has for at least ten years been an advocate of a High Court 3[***] or of two or more such Courts in succession; 4[***]
Explanation. For the purposes of this clause-
5[(a) In computing the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been an advocate of a High Court or has held the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law;]
6[(aa)] In computing the period during which a person has been an advocate of a High Court, there shall be included any period during which the person 7[has held judicial office or the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law] after he became an advocate;
(b) In computing the period during which a person has held judicial office in the territory of India or been an advocate of a High Court, there shall be included any period before the commencement of this Constitution during which he has held judicial office in any area which was comprised before the fifteenth day of August, 1947, within India as defined by the Government of India Act, 1935, or has been an advocate of any High Court in any such area, as the case may be.
8[(3) If any question arises as to the age of a Judge of a High Court, the question shall be decided by the President after consultation with the Chief Justice of India and the decision of the President shall be final.]
1. Subs. by s. 12, ibid., for “shall hold office until he attains the age of sixty years”.
2. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 4, for “sixty years”.
3. The words “in any State specified in the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
4. The word “or” and sub-clause (c) were ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 36 (w.e.f. 3-1-1977) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 28 (w.e.f. 20-6-1979).
5. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 28 (w.e.f. 20-6-1979).
6. Cl. (a) re-lettered as cl. (aa) by s. 28, the Constitution (Forty-fourth Amendment) Act, 1978. (w.e.f. 20-6-1979).
7. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 36, for “has held judicial office” (w.e.f. 3-1-1977).
8. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 4 (with retrospective effect).
Section 218. Application of certain provisions relating to Supreme Court to High Courts
The provisions of clauses (4) and (5) of article 124 shall apply in relation to a High Court as they apply in relation to the Supreme Court with the substitution of references to the High Court for references to the Supreme Court.
Section 219. Oath or affirmation by Judges of High Courts
Every person appointed to be a Judge of a High Court 1[***] shall, before he enters upon his office, make and subscribe before the Governor of the State, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
1. The words “in a State” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 220. Restriction on practice after being a permanent Judge
1[220. Restriction on practice after being a permanent Judge.
No person who, after the commencement of this Constitution, has held office as a permanent Judge of a High Court shall plead or act in any court or before any authority in India except the Supreme Court and the other High Courts.
Explanation. In this article, the expression “High Court” does not include a High Court for a State specified in Part B of the First Schedule as it existed before the commencement2 of the Constitution (Seventh Amendment) Act, 1956.]
1. Subs. by s. 13, the Constitution (Seventh Amendment) Act, 1956, for art. 220.
2. 1st November, 1956.
Section 221. Salaries, etc., of Judges
1[(1) There shall be paid to the Judges of each High Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.]
(2) Every Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such allowances and rights as are specified in the Second Schedule:
Provided that neither the allowances of a Judge nor his rights in respect of leave of absence or pension shall be varied to his disadvantage after his appointment.
1. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 3, for cl. (1) (w.e.f. 1-4-1986).
Section 222. Transfer of a Judge from one High Court to another
(1) The President may, after consultation with the Chief Justice of India, transfer a Judge from one High Court to any other High Court 1[***].
2[(2) When a Judge has been or is so transferred, he shall, during the period he serves, after the commencement of the Constitution (Fifteenth Amendment) Act, 1963, as a Judge of the other High Court, be entitled to receive in addition to his salary such compensatory allowance as may be determined by Parliament by law and, until so determined, such compensatory allowance as the President may by order fix.]
1. The words “within the territory of India” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 14.
2. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 5. Original Cl. (2) was omitted by the Constitution (Seventh Amendment) Act, 1956, s. 14.
Section 223. Appointment of acting Chief Justice
When the office of Chief Justice of a High Court is vacant or when any such Chief Justice is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such one of the other Judges of the Court as the President may appoint for the purpose.
Section 224. Appointment of additional and acting Judges
1[224. Appointment of additional and acting Judges.
(1) If by reason of any temporary increase in the business of a High Court or by reason of arrears of work therein, it appears to the President that the number of the Judges of that Court should be for the time being increased, the President may appoint duly qualified persons to be additional Judges of the Court for such period not exceeding two years as he may specify.
(2) When any Judge of a High Court other than the Chief Justice is by reason of absence or for any other reason unable to perform the duties of his office or is appointed to act temporarily as Chief Justice, the President may appoint a duly qualified person to act as a Judge of that Court until the permanent Judge has resumed his duties.
(3) No person appointed as an additional or acting Judge of a High Court shall hold office after attaining the age of 2[sixty-two years].]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 15, for art. 224.
2. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 6, for “sixty years”.
Section 224A. Appointment of retired Judges at sittings of High Courts
1[224A. Appointment of retired Judges at sittings of High Courts.
Notwithstanding anything in this Chapter, the Chief Justice of a High Court for any State may at any time, with the previous consent of the President, request any person who has held the office of a Judge of that Court or of any other High Court to sit and act as a Judge of the High Court for that State, and every such person so requested shall, while so sitting and acting, be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that High Court:
Provided that nothing in this article shall be deemed to require any such person as aforesaid to sit and act as a Judge of that High Court unless he consents so to do.]
1. Ins. by s. 7, the Constitution (Fifteenth Amendment) Act, 1963.
Section 225. Jurisdiction of existing High Courts
Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
1[Provided that any restriction to which the exercise of original jurisdiction by any of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the exercise of such jurisdiction.]
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 29 (w.e.f. 20-6-1979). Original proviso was omitted by the Constitution (Forty-second Amendment) Act, 1976, s. 37 (w.e.f. 1-2-1977).
Section 226. Power of High Courts to issue certain writs
1[226. Power of High Courts to issue certain writs.
(1) Notwithstanding anything in article 32 2[***] every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including 3[writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.]
(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.
4[(3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without-
(a) Furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and
Section 226A. Constitutional validity of Central laws not to be considered in proceedings under article 226
1[226A. Constitutional validity of Central laws not to be considered in proceedings under article 226.]
Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 8 (w.e.f. 13-4-1978).
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 39 (w.e.f. 1-2-1977).
Section 227. Power of superintendence over all courts by the High Court
1[(1) Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction.]
(2) Without prejudice to the generality of the foregoing provision, the High Court may-
(a) Call for returns from such courts;
(b) Make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and
(c) Prescribe forms in which books, entries and accounts shall be kept by the officers of any such courts.
(3) The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts and to attorneys, advocates and pleaders practising therein:
Provided that any rules made, forms prescribed or tables settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force, and shall require the previous approval of the Governor.
Section 228. Transfer of certain cases to High Court
If the High Court is satisfied that a case pending in a court subordinate to it involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the case, 1[it shall withdraw the case and 2*** may-]
(a) Either dispose of the case itself, or
(b) Determine the said question of law and return the case to the court from which the case has been so withdrawn together with a copy of its judgment on such question, and the said court shall on receipt thereof proceed to dispose of the case in conformity with such judgment.
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 41, for “it shall withdraw the case and may-” (w.e.f. 1-2-1977)
2. The words, figures and letter “subject to the provisions of article 131A, “omitted by the Constitution (Forty-third Amendment) Act, 1977, s.9 (w.e.f. 13-4-1978).
Section 228A. Special provisions as to disposal of questions relating to constitutional validity of State laws
1228A. Special provisions as to disposal of questions relating to constitutional validity of State laws.
Rep. by the Constitution (Forty-third Amendment) Act, 1977, s. 10 (w.e.f. 13-4-1978).
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 42 (w.e.f. 1-2-1977).
Section 229. Officers and servants and the expenses of High Courts.
(1) Appointments of officers and servants of a High Court shall be made by the Chief Justice of the Court or such other Judge or officer of the Court as he may direct:
Provided that the Governor of the State 1[***] may by rule require that in such cases as may be specified in the rule no person not already attached to the Court shall be appointed to any office connected with the Court save after consultation with the State Public Service Commission.
(2) Subject to the provisions of any law made by the Legislature of the State, the conditions of service of officers and servants of a High Court shall be such as may be prescribed by rules made by the Chief Justice of the Court or by some other Judge or officer of the Court authorised by the Chief Justice to make rules for the purpose:
Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the Governor of the State 1[***].
(3) The administrative expenses of a High Court, including all salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, shall be charged upon the Consolidated Fund of the State, and any fees or other moneys taken by the Court shall form part of that Fund.
1. The words “in which the High Court has its principal seat” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 230. Extension of jurisdiction of High Courts to Union territories.
1[230. Extension of jurisdiction of High Courts to Union territories.
(1) Parliament may by law extend the jurisdiction of a High Court to, or exclude the jurisdiction of a High Court from, any Union territory.
(2) Where the High Court of a State exercises jurisdiction in relation to a Union territory,-
(a) Nothing in this Constitution shall be construed as empowering the Legislature of the State to increase, restrict or abolish that jurisdiction; and
(b) The reference in article 227 to the Governor shall, in relation to any rules, forms or tables for subordinate courts in that territory, be construed as a reference to the President.
1. Subs. by s. 16, the Constitution (Seventh Amendment) Act, 1956, for arts. 230, 231 and 232.
Section 231. Establishment of a common High Court for two or more States.
(1) Notwithstanding anything contained in the preceding provisions of this Chapter, Parliament may by law establish a common High Court for two or more States or for two or more States and a Union territory.
(2) In relation to any such High Court, -
(a) The reference in article 217 to the Governor of the State shall be construed as a reference to the Governors of all the States in relation to which the High Court exercises jurisdiction;
(b) The reference in article 227 to the Governor shall, in relation to any rules, forms or tables for subordinate courts, be construed as a reference to the Governor of the State in which the subordinate courts are situate; and
(c) The references in article 219 and 229 to the State shall be construed as a reference to the State in which the High Court has its principal seat:
Provided that if such principal seat is in a Union territory, the references in article 219 and 229 to the Governor, Public Service Commission, Legislature and Consolidated Fund of the State shall be construed respectively as references to the President, Union Public Service Commission, Parliament and Consolidated Fund of India.]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 16, for article 230.
Section 232. Omitted
Omitted vide Constitution (Seventh Amendment) Act, 1956
Section 233. Appointment of district judges.
(1) Appointments of persons to be, and the posting and promotion of, district judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State.
(2) A person not already in the service of the Union or of the State shall only be eligible to be appointed a district judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment.
Section 233A. Validation of appointments of, and judgments, etc., delivered by, certain district judges.
1[233A. Validation of appointments of, and judgments, etc., delivered by, certain district judges.
Notwithstanding any judgment, decree or order of any court, -
(a) (i) No appointment of any person already in the judicial service of a State or of any person who has been for not less than seven years an advocate or a pleader, to be a district judge in that State, and
(ii) No posting, promotion or transfer of any such person as a district judge,
Made at any time before the commencement of the Constitution (Twentieth Amendment) Act, 1966, otherwise than in accordance with the provisions of article 233 or article 235 shall be deemed to be illegal or void or ever to have become illegal or void by reason only of the fact that such appointment, posting, promotion or transfer was not made in accordance with the said provisions;
(b) No jurisdiction exercised, no judgment, decree, sentence or order passed or made, and no other act or proceeding done or taken, before the commencement of the Constitution (Twentieth Amendment) Act, 1966 by, or before, any person appointed, posted, promoted or transferred as a district judge in any State otherwise than in accordance with the provisions of article 233 or article 235 shall be deemed to be illegal or invalid or ever to have become illegal or invalid by reason only of the fact that such appointment, posting, promotion or transfer was not made in accordance with the said provisions.]
1. Ins. by the Constitution (Twentieth Amendment) Act, 1966, s. 2.
Section 234. Recruitment of persons other than district judges to the judicial service.
Appointments of persons other than district judges to the judicial service of a State shall be made by the Governor of the State in accordance with rules made by him in that behalf after consultation with the State Public Service Commission and with the High Court exercising jurisdiction in relation to such State.
Section 235. Control over subordinate courts.
The control over district courts and courts subordinate thereto including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court, but nothing in this article shall be construed as taking away from any such person any right of appeal which he may have under the law regulating the conditions of his service or as authorising the High Court to deal with him otherwise than in accordance with the conditions of his service prescribed under such law
Section 236. Interpretation.
In this Chapter-
(a) The expression “district judge” includes judge of a city civil court, additional district judge, joint district judge, assistant district judge, chief judge of a small cause court, chief presidency magistrate, additional chief presidency magistrate, session’s judge, additional sessions judge and assistant sessions Judge;
(b) The expression “judicial service” means a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge.
Section 237. Application of the provisions of this Chapter to certain class or classes of magistrates.
The Governor may by public notification direct that the foregoing provisions of this Chapter and any rules made thereunder shall with effect from such date as may be fixed by him in that behalf apply in relation to any class or classes of magistrates in the State as they apply in relation to persons appointed to the judicial service of the State subject to such exceptions and modifications as may be specified in the notification.
Section 238. Repealed.
[The States in Part B of the First Schedule]. Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 239. Administration of Union territories.
1 [239. Administration of Union territories.
(1) Save as otherwise provided by Parliament by law, every Union territory shall be administered by the President acting, to such extent as he thinks fit, through an administrator to be appointed by him with such designation as he may specify.
(2) Notwithstanding anything contained in Part VI, the President may appoint the Governor of a State as the administrator of an adjoining Union territory, and where a Governor is so appointed, he shall exercise his functions as such administrator independently of his Council of Ministers.
2. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 17, for art. 239.
Section 239A. Creation of local Legislatures or Council of Ministers or both for certain Union territories.
1[239A. Creation of local Legislatures or Council of Ministers or both for certain Union territories.
(1) Parliament may by law create 2[for the Union territory of Pondicherry]-
(a) A body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union territory, or
(b) A Council of Ministers,
Or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.]
1. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, s. 4.
2. Subs. by the Goa, Daman and Diu Reoranisation Act, 1987 (18 of 1987), s. 63, for “for any of the Union territories of Goa, Daman and Diu and Pondicherry” (w.e.f. 30-5-1987).
Section 239AA. Special provisions with respect to Delhi.
1[239AA. Special provisions with respect to Delhi.
(1) As from the date of commencement of the Constitution (Sixty-ninth Amendment) Act, 1991, the Union territory of Delhi shall be called the National Capital Territory of Delhi (hereafter in this Part referred to as the National Capital Territory) and the administrator thereof appointed under article 239 shall be designated as the Lieutenant Governor.
(2) (a) There shall be a Legislative Assembly for the National Capital Territory and the seats in such Assembly shall be filled by members chosen by direct election from territorial constituencies in the National Capital Territory.
(b) The total number of seats in the Legislative Assembly, the number of seats reserved for Scheduled Castes, the division of the National Capital Territory into territorial constituencies (including the basis for such division) and all other matters relating to the functioning of the Legislative Assembly shall be regulated by law made by Parliament.
(c) The provisions of articles 324 to 327 and 329 shall apply in relation to the National Capital Territory, Legislative Assembly of the National Capital Territory and the members thereof as they apply, in relation to a State, the Legislative Assembly of a State and the members thereof respectively; and any reference in articles 326 and 329 to “appropriate Legislature” shall be deemed to be a reference to Parliament.
(3) (a) Subject to the provisions of this Constitution, the Legislative Assembly shall have power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2, and 18.
(b) Nothing in sub-clause (a) shall derogate from the powers of Parliament under this Constitution to make laws with respect to any matter for a Union territory or any part thereof.
(c) If any provision of a law made by the Legislative Assembly with respect to any matter is repugnant to any provision of a law made by Parliament with respect to that matter, whether passed before or after the law made by the Legislative Assembly, or of an earlier law, other than a law made by the Legislative Assembly, then, in either case, the law made by Parliament, or, as the case may be, such earlier law, shall prevail and the law made by the Legislative Assembly shall, to the extent of the repugnancy, be void:
Provided that if any such law made by the Legislative Assembly has been reserved for the consideration of the President and has received his assent, such law shall prevail in the National Capital Territory:
Provided further that nothing in this sub-clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislative Assembly.
(4) There shall be a Council of Ministers consisting of not more than ten per cent. of the total number of members in the Legislative Assembly, with the Chief Minister at the head to aid and advise the Lieutenant Governor in the exercise of his functions in relation to matters with respect to which the Legislative Assembly has power to make laws, except in so far as he is, by or under any law, required to act in his discretion:
Provided that in the case of difference of opinion between the Lieutenant Governor and his Ministers on any matter, the Lieutenant Governor shall refer it to the President for decision and act according to the decision given thereon by the President and pending such decision it shall be competent for the Lieutenant Governor in any case where the matter, in his opinion, is so urgent that it is necessary for him to take immediate action, to take such action or to give such direction in the matter as he deems necessary.
(5) The Chief Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Chief Minister and the Ministers shall hold office during the pleasure of the President.
(6) The Council of Ministers shall be collectively responsible to the Legislative Assembly.
2[(7) (a)] Parliament may, by law, make provisions for giving effect to, or supplementing the provisions contained in the foregoing clauses and for all matters incidental or consequential thereto.
3[(b) Any such law as is referred to in sub-clause (a) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending, this Constitution.]
(8) The provisions of article 239B shall, so far as may be, apply in relation to the National Capital Territory, the Lieutenant Governor and the Legislative Assembly, as they apply in relation to the Union territory of Pondicherry, the administrator and its Legislature, respectively; and any reference in that article to “clause (1) of article 239A” shall be deemed to be a reference to this article or article 239AB, as the case may be.
1. Ins. by the Constitution (Sixty-ninth Amendment) Act, 1991, s. 2 (w.e.f. 1-2-1992).
2. Subs. by the Constitution (Seventieth Amendment) Act, 1992, s.3, for “(7)” (w.e.f. 21-12-1991).
3. Ins. by s. 3, the Constitution (Seventieth Amendment) Act, 1992, (w.e.f. 21-12-1991).
Section 239AB. Provision in case of failure of constitutional machinery
If the President, on receipt of a report from the Lieutenant Governor or otherwise, is satisfied-
(a) That a situation has arisen in which the administration of the National Capital Territory cannot be carried on in accordance with the provisions of article 239AA or of any law made in pursuance of that article; or
(b) That for the proper administration of the National Capital Territory it is necessary or expedient so to do,
The President may by order suspend the operation of any provision of article 239AA or of all or any of the provisions of any law made in pursuance of that article for such period and subject to such conditions as may be specified in such law and make such incidental and consequential provisions as may appear to him to be necessary or expedient for administering the National Capital Territory in accordance with the provisions of article 239 and article 239AA.]
Section 239B. Power of administrator to promulgate Ordinances during recess of Legislature
1[239B. Power of administrator to promulgate Ordinances during recess of Legislature.
(1) If at any time, except when the Legislature of 2the Union territory of 3[Pondicherry] is in session, the administrator thereof is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require:
Provided that no such Ordinance shall be promulgated by the administrator except after obtaining instructions from the President in that behalf:
Provided further that whenever the said Legislature is dissolved, or its functioning remains suspended on account of any action taken under any such law as is referred to in clause (1) of article 239A, the administrator shall not promulgate any Ordinance during the period of such dissolution or suspension.
(2) An Ordinance promulgated under this article in pursuance of instructions from the President shall be deemed to be an Act of the Legislature of the Union territory which has been duly enacted after complying with the provisions in that behalf contained in any such law as is referred to in clause (1) of article 239A, but every such Ordinance-
(a) Shall be laid before the Legislature of the Union territory and shall cease to operate at the expiration of six weeks from the reassembly of the Legislature or if, before the expiration of that period, a resolution disapproving it is passed by the Legislature, upon the passing of the resolution; and
(b) May be withdrawn at any time by the administrator after obtaining instructions from the President in that behalf.
(3) If and so far as an Ordinance under this article makes any provision which would not be valid if enacted in an Act of the Legislature of the Union territory made after complying with the provisions in that behalf contained in any such law as is referred to in clause (1) of article 239A, it shall be void.]
4[* * * *]
1. Ins. by the Constitution (Twenty-seventh Amendment) Act, 1971, sec. 3 (w.e.f. 30-12-1971).
2. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, for “a Union territory referred to in clause (1) of article 239A” (w.e.f. 30-5-1987).
3. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006), sec. 4, for “Pondicherry” (w.e.f. 1-10-2006).
4. Cl. (4) was ins by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 4 (retrospectively) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 32 (w.e.f. 20-6-1979).
Section 240. Power of President to make regulations for certain Union territories
1[240. Power of President to make regulations for certain Union territories.
(1) The President may make regulations for the peace, progress and good government of the Union territory of-
(a) The Andaman and Nicobar Islands;
2[(b) Lakshadweep;]
3[(c) Dadra and Nagar Haveli;]
4[(d) Daman and Diu;]
5[(e)6 Pondicherry:]
7[* * * * *]
8[* * * * *]
9[Provided that when any body is created under article 239A to function as a Legislature for the 10[Union territory of 11[Pondicherry]], the President shall not make any regulation for the peace, progress and good government of that Union territory with effect from the date appointed for the first meeting of the Legislature:]
12[Provided further that whenever the body functioning as a Legislature for the Union territory of 11[Pondicherry] is dissolved, or the functioning of that body as such Legislature remains suspended on account of any action taken under any such law as is referred to in clause (1) of article 239A, the President may, during the period of such dissolution or suspension, make regulations for the peace, progress and good government of that Union territory.]
(2) Any regulation so made may repeal or amend any Act made by Parliament or 13[any other law] which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory.]
1. Subs. by the Laccadive, Minicoy and Aminidivi Islands Alteration of Name) Act, 1973 (34 of 1973), s. 4, for entry (b) (w.e.f. 1-11-1973).
2. Ins. by the Constitution (Tenth Amendment) Act, 1961, s. 3.
3. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, for entry (d) (w.e.f. 30-5-1987). Entry (d) was ins. by the Constitution (Twelfth Amendment) Act, 1962, s. 3.
4. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, ss. 5 and 7 (w.e.f. 16-8-1962).
5. The entry (f) relating to Mizoram omitted by the State of Mizoram Act, 1986 (34 of 1986), s. 39 (w.e.f. 20-2-1987).
6. The entry (g) relating to Arunachal Pradesh omitted by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 42 (w.e.f. 20-2-1987).
7. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, s. 5.
8. Subs. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 4, for “Union territory of Goa, Daman and Diu or Pondicherry” (w.e.f. 15-2-1972).
9. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, for “Goa, Daman and Diu or Pondicherry” (w.e.f. 30-5-1987).
10. Ins. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 4 (w.e.f. 15-2-1972).
11. Subs. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 4 (w.e.f. 15-2-1972).
12. Subs. by the Constitution (Twenty Seventh Amendment) Act, 1956, sec. 17, for art. 240.
13. Subs. by the Constitution (Twenty-seventh Amendment) Act, 1971, sec. 4, for “any existing law” (w.e.f. 15-2-1972).
Section 241. High Courts for Union territories
(1) Parliament may by law constitute a High Court for a 1[Union territory] or declare any court in any 2[such territory] to be a High Court for all or any of the purposes of this Constitution.
(2) The provisions of Chapter V of Part VI shall apply in relation to every High Court referred to in clause (1) as they apply in relation to a High Court referred to in article 214 subject to such modifications or exceptions as Parliament may by law provide.
3[(3) Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by or under this Constitution, every High Court exercising jurisdiction immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, in relation to any Union territory shall continue to exercise such jurisdiction in relation to that territory after such commencement.
(4) Nothing in this article derogates from the power of Parliament to extend or exclude the jurisdiction of a High Court for a State to, or from, any Union territory or part thereof.]
1. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “State specified in Part C of the First Schedule
2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “such State”.
3. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for cls. (3) and (4).
Section 242. Coorg
Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 243. Definitions
1243. Definitions.
In this Part, unless the context otherwise requires, -
(a) “District” means a district in a State;
(b) “Gram Sabha” means a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of Panchayat at the village level;
(c) “Intermediate level” means a level between the village and district levels specified by the Governor of a State by public notification to be the intermediate level for the purposes of this Part;
(d) “Panchayat” means an institution (by whatever name called) of self-government constituted under article 243B, for the rural areas;
(e) “Panchayat area” means the territorial area of a Panchayat;
(f) “Population” means the population as ascertained at the last preceding census of which the relevant figures have been published;
(g) “Village” means a village specified by the Governor by public notification to be a village for the purposes of this Part and includes a group of villages so specified.
1. Ins. by the Constitution (Seventy-third Amendment) Act, 1992, s. 2 (w.e.f. 24-4-1993).
Section 243A. Gram Sabha
1[243A. Gram Sabha. —A Gram Sabha may exercise such powers and perform such functions at the village level as the Legislature of a State may, by law, provide.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243B. Constitution of Panchayats
1243B. Constitution of Panchayats
(1) There shall be constituted in every State, Panchayats at the village, intermediate and district levels in accordance with the provisions of this Part.
(2) Notwithstanding anything in clause (1), Panchayats at the intermediate level may not be constituted in a State having a population not exceeding twenty lakhs.
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243C. Composition of Panchayats
1[243C. Composition of Panchayats. —(1) Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the composition of Panchayats:
Provided that the ratio between the population of the territorial area of a Panchayat at any level and the number of seats in such Panchayat to be filled by election shall, so far as practicable, be the same throughout the State.
(2) All the seats in a Panchayat shall be filled by persons chosen by direct election from territorial constituencies in the Panchayat area and, for this purpose, each Panchayat area shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the Panchayat area.
(3) The Legislature of a State may, by law, provide for the representation—
(a) of the Chairpersons of the Panchayats at the village level, in the Panchayats at the intermediate level or, in the case of a State not having Panchayats at the intermediate level, in the Panchayats at the district level;
(b) of the Chairpersons of the Panchayats at the intermediate level, in the Panchayats at the district level;
(c) of the members of the House of the People and the members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly a Panchayat area at a level other than the village level, in such Panchayat;
(d) of the members of the Council of States and the members of the Legislative Council of the State, where they are registered as electors within—
(i) a Panchayat area at the intermediate level, in Panchayat at the intermediate level;
(ii) a Panchayat area at the district level, in Panchayat at the district level.
(4) The Chairperson of a Panchayat and other members of a Panchayat whether or not chosen by direct election from territorial constituencies in the Panchayat area shall have the right to vote in the meetings of the Panchayats.
(5) The Chairperson of—
(a) Panchayat at the village level shall be elected in such manner as the Legislature of a State may, by law, provide; and
(b) a Panchayat at the intermediate level or district level, shall be elected by, and from amongst, the elected members thereof.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243D. Reservation of seats
1[243D. Reservation of seats. —(1) Seats shall be reserved for—
(a) the Scheduled Castes; and
(b) the Scheduled Tribes,
in every Panchayat and the number of seats so reserved shall bear, as nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Panchayat as the population of the Scheduled Castes in that Panchayat area or of the Scheduled Tribes in that Panchayat area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Panchayat.
(2) Not less than one-third of the total number of seats reserved under clause (1) shall be reserved for women belonging to the Scheduled Castes or, as the case may be, the Scheduled Tribes.
(3) Not less than one-third (including the number of seats reserved for women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Panchayat shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Panchayat.
(4) The offices of the Chairpersons in the Panchayats at the village or any other level shall be reserved for the Scheduled Castes, the Scheduled Tribes and women in such manner as the Legislature of a State may, by law, provide:
Provided that the number of offices of Chairpersons reserved for the Scheduled Castes and the Scheduled Tribes in the Panchayats at each level in any State shall bear, as nearly as may be, the same proportion to the total number of such offices in the Panchayats at each level as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State bears to the total population of the State:
Provided further that not less than one-third of the total number of offices of Chairpersons in the Panchayats at each level shall be reserved for women:
Provided also that the number of offices reserved under this clause shall be allotted by rotation to different Panchayats at each level.
(5) The reservation of seats under clauses (1) and (2) and the reservation of offices of Chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.
(6) Nothing in this Part shall prevent the Legislature of a State from making any provision for reservation of seats in any Panchayat or offices of Chairpersons in the Panchayats at any level in favour of backward class of citizens.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243E. Duration of Panchayats, etc.
1[243E. Duration of Panchayats, etc. —(1) Every Panchayat, unless sooner dissolved under any law for the time being in force, shall continue for five years from the date appointed for its first meeting and no longer.
(2) No amendment of any law for the time being in force shall have the effect of causing dissolution of a Panchayat at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1).
(3) An election to constitute a Panchayat shall be completed—
(a) before the expiry of its duration specified in clause (1);
(b) before the expiration of a period of six months from the date of its dissolution:
Provided that where the remainder of the period for which the dissolved Panchayat would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Panchayat for such period.
(4) A Panchayat constituted upon the dissolution of a Panchayat before the expiration of its duration shall continue only for the remainder of the period for which the dissolved Panchayat would have continued under clause (1) had it not been so dissolved.
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243F. Disqualifications for membership
1[243F. Disqualifications for membership
(1) A person shall be disqualified for being chosen as, and for being, a member of a Panchayat—
(a) if he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned:
Provided that no person shall be disqualified on the ground that be is less than twenty-five years of age, if he has attained the age of twenty-one years;
(b) if he is so disqualified by or under any law made by the Legislature of the State.
(2) If any question arises as to whether a member of a Panchayat has become subject to any of the disqualifications mentioned in clause (1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243G. Powers, authority and responsibilities of Panchayat
1[243G. Powers, authority and responsibilities of Panchayat. —
Subject to the provisions of this Constitution the Legislature of a State may, by law, endow the Panchayats with such powers and authority and may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats, at the appropriate level, subject to such conditions as may be specified therein, with respect to—
(a) the preparation of plans for economic development and social justice;
(b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243H. Powers to impose taxes by, and Funds of, the Panchayats
1[243H. Powers to impose taxes by, and Funds of, the Panchayats.
The Legislature of a State may, by law,—
(a) authorise a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;
(b) assign to a Panchayat such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;
(c) provide for making such grants-in-aid to the Panchayats from the Consolidated Fund of the State; and
(d) provide for constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Panchayats and also for the withdrawal of such moneys therefrom, as may be specified in the law.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243-I. Constitution of Finance Commission to review financial position
1[243-I. Constitution of Finance Commission to review financial position.
(1) The Governor of a State shall, as soon as may be within one year from the commencement of the Constitution (Seventy-third Amendment) Act, 1992, and thereafter at the expiration of every fifth year, constitute a Finance Commission to review the financial position of the Panchayats and to make recommendations to the Governor as to—
(a) the principles which should govern—
(i) the distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Panchayats at all levels of their respective shares of such proceeds;
(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Panchayats;
(iii) the grants-in-aid to the Panchayats from the Consolidated Fund of the State;
(b) the measures needed to improve the financial position of the Panchayats;
(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Panchayats.
(2) The Legislature of a State may, by law, provide for the composition of the Commission, the qualifications which shall be requisite for appointment as members thereof and the manner in which they shall be selected.
(3) The Commission shall determine their procedure and shall have such powers in the performance of their functions as the Legislature of the State may, by law, confer on them.
(4) The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243J. Audit of accounts of Panchayats
1[243J. Audit of accounts of Panchayats. —The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Panchayats and the auditing of such accounts.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243K. Elections to the Panchayats
1[243K. Elections to the Panchayats. —The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats shall be vested in a State Election
Commission consisting of a State Election Commissioner to be appointed by the Governor.
(2) Subject to the provisions of any law made by the Legislature of a State the conditions of service and tenure of office of the State Election Commissioner shall be such as the Governor may by rule determine:
Provided that the State Election Commissioner shall not be removed from his office except in like manner and on the like ground as a Judge of a High Court and the conditions of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment.
(3) The Governor of a State shall, when so requested by the State Election Commission, make available to the State Election Commission such staff as may be necessary for the discharge of the functions conferred on the State Election Commission by clause (1).
(4) Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Panchayats.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution (seventh Amendment) Act, 1956, sec.29 and sch.
Section 243L. Application to Union territories.
1[243L. Application to Union territories. —The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under 239 and references to the Legislature or the Legislative Assembly of a State were references, in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243M. Part not to apply to certain areas
1[243M. Part not to apply to certain areas. —(1) Nothing in this Part shall apply to the Scheduled Areas referred to in clause (1), and the tribal areas referred to in clause (2), of article 244.
(2) Nothing in this Part shall apply to—
(a) the States of Nagaland , Meghalaya and Mizoram;
(b) the hill areas in the State of Manipur for which District Councils exist under any law for the time being in force.
(3) Nothing in this Part—
(a) relating to Panchayats at the district level shall apply to the hill areas of the District of Darjeeling in the State of West Bengal for which Darjeeling Gorkha Hill Council exists under any law for the time being in force;
(b) shall be construed to affect the functions and powers of the Darjeeling Gorkha Hill Council constituted under such law.
2 [(3A) Nothing in article 243D, relating to reservation of seats for the Scheduled Castes, shall apply to the State of Arunachal Pradesh.]
(4) Notwithstanding anything in this Constitution—
(a) the Legislature of a State referred to in sub-clause (a) of clause (2)
may, by law, extend this Part to that State, except the areas, if any,
referred to in clause (1), if the Legislative Assembly of that State passes a resolution to that effect by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting;
(b) Parliament may, by law, extend the provisions of this Part to the Scheduled Areas and the tribal areas referred to in clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
2. Ins. by the Constitution (Eighty-third Amendment) Act, 2000, sec. 2 (w.e.f. 8-9-2000).
Section 243N. Continuance of existing laws and Panchayats
1[243N. Continuance of existing laws and Panchayats. —
Notwithstanding anything in this Part, any provision of any law relating to Panchayats in force in a State immediately before commencement of the Constitution (Seventy-third Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement whichever is earlier:
Provided that all the Panchayats existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State.]
———-
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243-O. Bar to interference by courts in electoral matters
1243-O. Bar to interference by courts in electoral matters.
Notwithstanding anything in this Constitution, -
(a) The validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243K, shall not be called in question in any court;
(b) No election to any Panchayat shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.]
1. Ins. by the Constitution ( seventy- third Amendment) Act, 1992 (w. e. f 24-4-1993). Earlier part ix dealing with territories in part D of the first schedule was replealed by the constitution ( seventh Amendment) Act, 1956, sec.29 and sch.
Section 243P. Definitions
*243P. Definitions.
In this Part, unless the context otherwise requires, -
(a) “Committee” means a Committee constituted under article 243S;
(b) “District” means a district in a State;
(c) “Metropolitan area” means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be a Metropolitan area for the purposes of this Part;
(d) “Municipal area” means the territorial area of a Municipality as is notified by the Governor;
(e) “Municipality” means an institution of self-government constituted under article 243Q;
(f) “Panchayat” means a Panchayat constituted under article 243B;
(g) “Population” means the population as ascertained at the last preceding census of which the relevant figures have been published.
* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243Q. Constitution of Municipalities
*[243Q. Constitution of Municipalities.—(1) There shall be constituted in every State,—
(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area.
(b) a Municipal Council for a smaller urban area; and
(c) a Municipal Corporation for a larger urban area,
in accordance with the provisions of this Part:
Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township.
(2) In this article, ‘a transitional area’, ‘a smaller urban area’ or ‘a larger urban area’ means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243R. Composition of Municipalities
*[243R. Composition of Municipalities.—
(1) Save as provided in clause (2), all the seats in a Municipality shall be filled by persons chosen by direct election from the territorial constituencies in the Municipal area and for this purpose each Municipal area shall be divided into territorial constituencies to be known as wards.
(2) The Legislature of a State may, by law, provide—
(a) for the representation in a Municipality of—
(i) persons having special knowledge or experience in Municipal administration;
(ii) the members of the House of the People and the members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly the Municipal area;
(iii) the members of the Council of States and the members of the Legislative Council of the State registered as electors within the Municipal area;
(iv) the Chairpersons of the Committees constituted under clause (5) of article 243S:
Provided that the persons referred to in paragraph (i) shall not have the right to vote in the meetings of the Municipality;
(b) the manner of election of the Chairperson of a Municipality.
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243S. Constitution and composition of Wards Committees, etc.
1[243S. Constitution and composition of Wards Committees, etc.—(1) There shall be constituted Wards Committees, consisting of one or more Wards, within the territorial area of a Municipality having a population of three lakhs or more.
(2) The Legislature of a State may, by law, make provision with respect to—
(a) the composition and the territorial area of a Wards Committee;
(b) the manner in which the seats in a Wards Committee shall be filled.
(3) A member of a Municipality representing a ward within the territorial area of the Wards Committee shall be a member of that Committee.
(4) Where a Wards Committee consists of—
(a) one ward, the member representing that ward in the Municipality; or
(b) two or more wards, one of the members representing such wards in the Municipality elected by the members of the Wards Committee,
shall be the Chairperson of that Committee.
(5) Nothing in this article shall be deemed to prevent the Legislature of a State from making any provision for the Constitution of Committees in addition to the Wards Committees.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243T. Reservation of seats.
1[243T. Reservation of seats.—(1) Seats shall be reserved for the Scheduled Castes and the Scheduled Tribes in every Municipality and the number of seats so reserved shall bear, as nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Municipality as the population of the Scheduled Castes in the Municipal area or of the Scheduled Tribes in the Municipal area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Municipality.
(2) Not less than one-third of the total number of seats reserved under clause (1) shall be reserved for women belonging to the Scheduled Castes or, as the case may be, the Scheduled Tribes.
(3) Not less than one-third (including the number of seats reserved for women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Municipality shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Municipality.
(4) The offices of Chairpersons in the Municipalities shall be reserved for the Scheduled Castes, the Scheduled Tribes and women in such manner as the Legislature of a State may, by law, provide.
(5) The reservation of seats under clauses (1) and (2) and the reservation of offices of Chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.
(6) Nothing in this Part shall prevent the Legislature of a State from making any provision for reservation of seats in any Municipality or offices of Chairpersons in the Municipalities in favour of backward class of citizens.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243U. Duration of Municipalities, etc.
*[243U. Duration of Municipalities, etc.—
(1) Every Municipality, unless sooner dissolved under any law for the time being in force, shall continue for five years from the date appointed for its first meeting and no longer:
Provided that a Municipality shall be given a reasonable opportunity of being heard before its dissolution.
(2) No amendment of any law for the time being in force shall have the effect of causing dissolution of a Municipality at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1).
(3) An election to constitute a Municipality shall be completed,—
(a) before the expiry of its duration specified in clause (1);
(b) before the expiration of a period of six months from the date of its dissolution:
Provided that where the remainder of the period for which the dissolved Municipality would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Municipality for such period.
(4) A Municipality constituted upon the dissolution of a Municipality before the expiration of its duration shall continue only for the remainder of the period for which the dissolved Municipality would have continued under clause (1) had it not been so dissolved.
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243V. Disqualifications for membership
*[243V. Disqualifications for membership.—(1) A person shall be disqualified for being chosen as, and for being a member of a Municipality—
(a) if he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned:
Provided that no person shall be disqualified on the ground that he is less than twenty-five years of age, if he has attained the age, of twenty-one years;
(b) if he is so disqualified by or under any law made by the Legislature of the State.
(2) If any question arises as to whether a member of a Municipality has become subject to any of the disqualifications mentioned in clause (1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243W. Powers, authority and responsibilities of Municipalities
*[243W. Powers, authority and responsibilities of Municipalities, etc.—Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow—
(a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to—
(i) the preparation of plans for economic development and social justice;
(ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule;
(b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243X. Power to impose taxes by, and Funds of, the Municipalities
*[243X. Power to impose taxes by, and Funds of, the Municipalities.—The Legislature of a State may, by law—
(a) authorise a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;
(b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State-Government for such purposes and subject to such conditions and limits;
(c) provide for making, such grants-in-aid to the Municipalities from the Consolidated Fund of the State; and
(d) provide for constitution of such Funds for crediting all moneys received respectively, by or on behalf of the Municipalities and also for the withdrawal of such moneys therefrom,as may be specified in the law.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243Y. Finance Commission
*[**243Y. Finance Commission.—(1) The Finance Commission constituted under article 243-I shall also review the financial position of the Municipalities and make recommendations to the Governor as to—
(a) the principles which should govern—
(i) the distribution between the State and the Municipalities of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Municipalities at all levels of their respective shares of such proceeds;
(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Municipalities;
(iii) the grants-in-aid to the Municipalities from the Consolidated Fund of the State;
(b) the measures needed to improve the financial position of the Municipalities;
(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Municipalities.
(2) The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
** In its application to the Union Territory of Dadra and Nagar Haveli, in clause (1) of Article 243Y, for the word “Governor”, at both the places, the word “President” shall be substituted. (Vide S.O. 615 (E), dated 21st May, 2004, published in the Gazette of India, Extra., Pt. II, Sec. 3(ii), dated 21st May, 2004).
Section 243Z. Audit of accounts of Municipalities.
*[243Z. Audit of accounts of Municipalities.—The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Municipalities and the auditing of such accounts.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243ZA. Elections to the Municipalities.
*[243ZA. Elections to the Municipalities.—(1) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Municipalities shall be vested in the State Election Commission referred to in article 243K.
(2) Subject to provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Municipalities.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243ZB. Application to Union territories.
*[243ZB. Application to Union territories.—The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under article 239 and references to the Legislature or the Legislative Assembly of a State were references in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243ZC. Part not to apply to certain areas
*[243ZC. Part not to apply to certain areas.—(1) Nothing in this Part shall apply to the Scheduled Areas referred to in Clause (1), and the tribal areas referred to in clause (2), of article 244.
(2) Nothing in this part shall be construed to affect the functions and powers of the Darjeeling Gorkha Hill Council constituted under any law for the time being in force for the hill areas of the district of Darjeeling in the State of West Bengal.
(3) Notwithstanding anything in this Constitution, Parliament may, by law, extend the provisions of this Part to the Scheduled Areas and the Tribal Areas referred to in clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243ZD. Committee for district planning
1[243ZD. Committee for district planning.
(1) There shall be constituted in every State at the district level a District Planning Committee to consolidate the plans prepared by the Panchayats and the Municipalities in the district and to prepare a draft development plan for the district as a whole.
(2) The Legislature of a State may, by law, make provision with respect to-
(a) The composition of the District Planning Committees;
(b) The manner in which the seats in such Committees shall be filled:
Provided that not less than four-fifths of the total number of members of such Committee shall be elected by, and from amongst, the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district;
(c) The functions relating to district planning, which may be assigned to such Committees;
(d) The manner in which the Chairpersons of such Committees shall be chosen.
(3) Every District Planning Committee shall, in preparing the draft development plan, -
(a) Have regard to-
(i) Matters of common interest between the Panchayats and the Municipalities including spatial planning, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;
(ii) The extent and type of available resources whether financial or otherwise;
(b) Consult such institutions and organisations as the Governor may, by order, specify.
(4) The Chairperson of every District Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State.
1. The provisions of article 243ZD shall not apply to the National Capital Territory of Delhi, vide S.O. 1125(E), dated 12-11-2001.
Section 243ZE. Committee for Metropolitan planning
*[**243ZE. Committee for Metropolitan planning.
(1) There shall be constituted in every Metropolitan area a Metropolitan Planning Committee to prepare a draft development plan for the Metropolitan area as a whole.
(2) The Legislature of a State may, by law, make provision with respect to-
(a) The composition of the Metropolitan Planning Committees;
(b) The manner in which the seats in such Committees shall be filled:
Provided that not less than two-thirds of the members of such Committee shall be elected by, and from amongst, the elected members of the Municipalities and Chairpersons of the Panchayats in the Metropolitan area in proportion to the ratio between the population of the Municipalities and of the Panchayats in that area;
(c) The representation in such Committees of the Government of India and the Government of the State and of such organisations and institutions as may be deemed necessary for carrying out the functions assigned to such Committees;
(d) The functions relating to planning and coordination for the Metropolitan area, which may be assigned to such Committees;
(e) The manner in which the Chairpersons of such Committees shall be chosen.
(3) Every Metropolitan Planning Committee shall, in preparing the draft development plan, -
(a) Have regard to-
(i) The plans prepared by the Municipalities and the Panchayats in the Metropolitan area;
(ii) Matters of common interest between the Municipalities and the Panchayats, including coordinated spatial planning of the area, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;
(iii) The overall objectives and priorities set by the Government of India and the Government of the State;
(iv) The extent and nature of investments likely to be made in the Metropolitan area by agencies of the Government of India and of the Government of the State and other available resources whether financial or otherwise;
(b) Consult such institutions and organisations as the Governor may, by order, specify.
(4) The Chairperson of every Metropolitan Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State.
* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
** The provisions of article 243ZE shall not apply to the National Capital Territory of Delhi, vide S.O. 1125(E), dated 12-11-2001.
Section 243ZF. Continuance of existing laws and municipalities
*[243ZF. Continuance of existing laws and municipalities.—
Notwithstanding anything in this Part, any provision of any law relating to Municipalities in force in a State immediately before the commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier:
Provided that all the Municipalities existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State.]
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* Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 243ZG. Bar to interference by courts in electoral
*[243ZG. Bar to interference by courts in electoral matters.—
Notwithstanding anything in this Constitution,—
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243ZF shall not be called in question in any court;
(b) no election to any Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.]
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*Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 2 (w.e.f. 1-6-1993).
Section 244. Administration of Scheduled Areas and Tribal Areas.
(1) The provisions of the Fifth Schedule shall apply to the administration and control of the Scheduled Areas and Scheduled Tribes in any State 1[***] other than 2[the States of Assam 3[, 4[Meghalaya, Tripura and Mizoram]]].
(2) The provisions of the Sixth Schedule shall apply to the administration of the tribal areas in 2[the States of Assam, 3[, 5[Meghalaya, Tripura and Mizoram]]].
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for “the State of Assam” (w.e.f. 21-1-1972).
3. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 2, for “and Meghalaya” (w.e.f. 1-4-1985).
4. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for “Meghalaya and Tripura” (w.e.f. 20-2-1987).
5. Subs. by s. 39, ibid., for “Meghalaya and Tripura and the Union territory of Mizoram” (w.e.f. 20-2-1987).
Section 244A. Formation of an autonomous State comprising certain tribal areas in Assam and creation of local Legislature or Council of Ministers or both therefor.
1[244A. Formation of an autonomous State comprising certain tribal areas in Assam and creation of local Legislature or Council of Ministers or both therefor.
(1) Notwithstanding anything in this Constitution, Parliament may, by law, form within the State of Assam an autonomous State comprising (whether wholly or in part) all or any of the tribal areas specified in 2[Part I] of the table appended to paragraph 20 of the Sixth Schedule and create therefor-
(a) A body, whether elected or partly nominated and partly elected, to function as a Legislature for the autonomous State, or
(b) A Council of Ministers,
Or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) may, in particular, -
(a) Specify the matters enumerated in the State List or the Concurrent List with respect to which the Legislature of the autonomous State shall have power to make laws for the whole or any part thereof, whether to the exclusion of the Legislature of the State of Assam or otherwise;
(b) Define the matters with respect to which the executive power of the autonomous State shall extend;
(c) Provide that any tax levied by the State of Assam shall be assigned to the autonomous State in so far as the proceeds thereof are attributable to the autonomous State;
(d) Provide that any reference to a State in any article of this Constitution shall be construed as including a reference to the autonomous State; and
(e) Make such supplemental, incidental and consequential provisions as may be deemed necessary.
(3) An amendment of any such law as aforesaid in so far as such amendment relates to any of the matters specified in sub-clause (a) or sub-clause (b) of clause (2) shall have no effect unless the amendment is passed in each House of Parliament by not less than two-thirds of the members present and voting.
(4) Any such law as is referred to in this article shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.]
1. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 2.
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for “Part A” (w.e.f. 21-1-1972)
Section 245. Extent of laws made by Parliament and by the Legislatures of States.
(1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
(2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.
Section 246. Subject-matter of laws made by Parliament and by the Legislatures of States.
(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”).
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State 1[***] also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).
(3) Subject to clauses (1) and (2), the Legislature of any State 1[***] has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the “State List”).
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included 2[in a State] notwithstanding that such matter is a matter enumerated in the State List.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956, for “in Part A or Part B of the First Schedule”.
Section 247. Power of Parliament to provide for the establishment of certain additional courts.
Notwithstanding anything in this Chapter, Parliament may by law provide for the establishment of any additional courts for the better administration of laws made by Parliament or of any existing laws with respect to a matter enumerated in the Union List.
Section 248. Residuary powers of legislation.
(1) Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
(2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.
Section 249. Power of Parliament to legislate with respect to a matter in the State List in the national interest.
(1) Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to any matter enumerated in the State List specified in the resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory of India with respect to that matter while the resolution remains in force.
(2) A resolution passed under clause (1) shall remain in force for such period not exceeding one year as may be specified therein:
Provided that, if and so often as a resolution approving the continuance in force of any such resolution is passed in the manner provided in clause (1), such resolution shall continue in force for a further period of one year from the date on which under this clause it would otherwise have ceased to be in force.
(3) A law made by Parliament which Parliament would not but for the passing of a resolution under clause (1) have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the resolution has ceased to be in force, except as respects things done or omitted to be done before the expiration of the said period.
Section 250. Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in operation.
(1) Notwithstanding anything in this Chapter, Parliament shall, while a Proclamation of Emergency is in operation, have power to make laws for the whole or any part of the territory of India with respect to any of the matters enumerated in the State List.
(2) A law made by Parliament which Parliament would not but for the issue of a Proclamation of Emergency have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the Proclamation has ceased to operate, except as respects things done or omitted to be done before the expiration of the said period.
Section 251. Inconsistency between laws made by Parliament under articles 249 and 250 and laws made by the Legislatures of States.
Nothing in articles 249 and 250 shall restrict the power of the Legislature of a State to make any law which under this Constitution it has power to make, but if any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament has under either of the said articles power to make, the law made by Parliament, whether passed before or after the law made by the Legislature of the State, shall prevail, and the law made by the Legislature of the State shall to the extent of the repugnancy, but so long only as the law made by Parliament continues to have effect, be inoperative.
Section 252. Power of Parliament to legislate for two or more States by consent and adoption of such legislation by any other State.
(1) If it appears to the Legislatures of two or more States to be desirable that any of the matters with respect to which Parliament has no power to make laws for the States except as provided in articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all the Houses of the Legislatures of those States, it shall be lawful for Parliament to pass an Act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State by which it is adopted afterwards by resolution passed in that behalf by the House or, where there are two Houses, by each of the Houses of the Legislature of that State.
(2) Any Act so passed by Parliament may be amended or repealed by an Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State.
Section 253. Legislation for giving effect to international agreements.
Notwithstanding anything in the foregoing provisions of this Chapter, Parliament has power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body.
Section 254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States.
(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State 1[***] with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 255. Requirements as to recommendations and previous sanctions to be regarded as matters of procedure only.
No Act of Parliament or of the Legislature of a State 1[***], and no provision in any such Act, shall be invalid by reason only that some recommendation or previous sanction required by this Constitution was not given, if assent to that Act was given-
(a) Where the recommendation required was that of the Governor, either by the Governor or by the President;
(b) Where the recommendation required was that of the Rajpramukh, either by the Rajpramukh or by the President;
(c) Where the recommendation or previous sanction required was that of the President, by the President.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 256. Obligation of States and the Union.
The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
Section 257. Control of the Union over States in certain cases.
(1) The executive power of every State shall be so exercised as not to impede or prejudice the exercise of the executive power of the Union, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
(2) The executive power of the Union shall also extend to the giving of directions to a State as to the construction and maintenance of means of communication declared in the direction to be of national or military importance:
Provided that nothing in this clause shall be taken as restricting the power of Parliament to declare highways or waterways to be national highways or national waterways or the power of the Union with respect to the highways or waterways so declared or the power of the Union to construct and maintain means of communication as part of its functions with respect to naval, military and air force works.
(3) The executive power of the Union shall also extend to the giving of directions to a State as to the measures to be taken for the protection of the railways within the State.
(4) Where in carrying out any direction given to a State under clause (2) as to the construction or maintenance of any means of communication or under clause (3) as to the measures to be taken for the protection of any railway, costs have been incurred in excess of those which would have been incurred in the discharge of the normal duties of the State if such direction had not been given, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of the extra costs so incurred by the State.
Section 257A. Assistance to States by deployment of armed forces or other forces of the Union.
1[257A. Assistance to States by deployment of armed forces or other forces of the Union.
Rep. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 33 (w.e.f. 20-6-1979).
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 43 (w.e.f. 3-1-1977).
Section 258. Power of the Union to confer powers, etc., on States in certain cases.
(1) Notwithstanding anything in this Constitution, the President may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officer’s functions in relation to any matter to which the executive power of the Union extends.
(2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof.
(3) Where by virtue of this article powers and duties have been conferred or imposed upon a State or officers or authorities thereof, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of any extra costs of administration incurred by the State in connection with the exercise of those powers and duties.
Section 258A. Power of the States to entrust functions to the Union.
1[ 258A. Power of the States to entrust functions to the Union.
Notwithstanding anything in this Constitution, the Governor of a State may, with the consent of the Government of India, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the State extends.]
1. Ins. by the Constitution (Seventh Amentment) Act, 1956, sec. 18.
Section 259. Armed Forces in States in Part B of the First Schedule.
Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 260. Jurisdiction of the Union in relation to territories outside India.
The Government of India may by agreement with the Government of any territory not being part of the territory of India undertake any executive, legislative or judicial functions vested in the Government of such territory, but every such agreement shall be subject to, and governed by, any law relating to the exercise of foreign jurisdiction for the time being in force
Section 261. Public acts, records and judicial proceedings.
(1) Full faith and credit shall be given throughout the territory of India to public acts, records and judicial proceedings of the Union and of every State.
(2) The manner in which and the conditions under which the acts, records and proceedings referred to in clause (1) shall be proved and the effect thereof determined shall be as provided by law made by Parliament.
(3) Final judgments or orders delivered or passed by civil courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law.
Section 262. Adjudication of disputes relating to waters of inter-State rivers or river valleys.
(1) Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter-State river or river valley.
(2) Notwithstanding anything in this Constitution, Parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause (1).
Section 263. Provisions with respect to an inter-State Council.
If at any time it appears to the President that the public interests would be served by the establishment of a Council charged with the duty of-
(a) Inquiring into and advising upon disputes which may have arisen between States;
(b) Investigating and discussing subjects in which some or all of the States, or the Union and one or more of the States, have a common interest; or
(c) Making recommendations upon any such subject and, in particular, recommendations for the better co-ordination of policy and action with respect to that subject,
It shall be lawful for the President by order to establish such a Council, and to define the nature of the duties to be performed by it and its organisation and procedure.
Section 264. Interpretation.
1[264. Interpretation.
In this Part, “Finance Commission” means a Finance Commission constituted under article 280.]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch., for art. 264.
Section 265. Taxes not to be imposed save by authority of law.—
No tax shall be levied or collected except by authority of law.
Section 266. Consolidated Funds and public accounts of India and of the States.—
(1) Subject to the provisions of article 267 and to the provisions of this Chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled “the Consolidated Fund of India”, and all revenues received by the Government of a State, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled “the Consolidated Fund of the State”.
(2) All other public moneys received by or on behalf of the Government of India or the Government of a State shall be credited to the public account of India or the public account of the State, as the case may be.
(3) No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.
Section 267. Contingency Fund.—
(1) Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of India” into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by Parliament by law under article 115 or article 116.
(2) The Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled “the Contingency Fund of the State” into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the Governor 1[***] of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by the Legislature of the State by law under article 205 or article 206.
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1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
Section 268. Duties levied by the Union but collected and appropriated by the States.
(1) Such stamp duties and such duties of excise on medicinal and toilet preparations as are mentioned in the Union List shall be levied by the Government of India but shall be collected-
(a) In the case where such duties are leviable within any 1[Union territory], by the Government of India, and
(b) In other cases, by the States within which such duties are respectively leviable.
(2) The proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State.
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and sch., for “State specified in Part C of the First Schedule”.
Section 268A. Service tax levied by Union and collected and appropriated by the Union and the States.
1[268A. Service tax levied by Union and collected and appropriated by the Union and the States.
(1) Taxes on service shall be levied by the Government of India and such tax shall be collected and appropriated by the Government of India and the States in the manner provided in clause (2)
(2) The proceeds in any financial year of any such tax levied in accordance with the provisions of clause (1) shall be -
(a) collected by the Government of India and the States;
(b) Appropriated by the Government of India and the States,
in accordance with such principles collection and appropriation as may be formulated by Parliament by law.]
1. Ins. by the Constitution (Eighty-eighth Amendment) Act, 2003, sec. 3.
Section 269. Taxes levied and collected by the Union but assigned to the States.
1[(1) Taxes on the sale or purchase of goods and taxes on the consignment of goods shall be levied and collected by the Government of India but shall be assigned and shall be deemed to have been assigned to the States on or after the 1st day of April, 1996 in the manner provided in clause (2).
Explanation-For the purposes of this clause, -
(a) The expression “taxes on the sale or purchase of goods” shall mean taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce;
(b) The expression “taxes on the consignment of goods” shall mean taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce;
(2) The net proceeds in any financial year of any such tax, except in so far as those proceeds represent proceeds attributable to Union territories, shall not form part of the Consolidated Fund of India, but shall be assigned to the State within which that tax is leviable in that year, and shall be distributed among those States in accordance with such principles of distribution as may be formulated by Parliament by law.]
2[(3) Parliament may by law formulate principles for determining when a 3[sale or purchase of, or consignment of, goods] takes place in the course of inter-State trade or
1. Subs. By the Constitution (Eightieth Amendment) Act, 2000, s.2 for cl. (1) & (2) (w.e.f. 9.6.2000)
2. Ins. by the Constitution (Sixth Amendment) Act, 1956, s. 3.
3. Subs. by the Constitution (Forty-sixth Amendment) Act, 1982, s. 2, for “sale or purchase of goods”.
Section 270. Taxes levied and distributed between the Union and the States
1[(1) All taxes and duties referred to in the Union List, except the duties and taxes referred to in 2[articles 268 and 269] respectively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2).
(2) Such percentage, as may be prescribed, of the net proceeds of any such tax or duty in any financial year shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax or duty is leviable in that year, and shall be distributed among those States in such manner and from such time as may be prescribed in the manner provided in clause (3).
(3) In this article, “Prescribed” means -
(i) Until a Finance Commission has been constituted, prescribed by the President by order, and
(ii) After a Finance Commission has been constituted, prescribed by the President by order after considering the recommendations of the Finance Commission.’]
1. Subs. by the Constitution (Eightieth Amendment) act, 2000, s.3 (w.e.f. 9.6.2000)
2. Subs. by the Constitution (Eighty-eighth Amendment) Act, 2003, sec. 3.
Section 271. Surcharge on certain duties and taxes for purposes of the Union.
Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India.
Section 272. Taxes which are levied and collected by the Union and may be distributed between the Union and the State
1[272. Taxes which are levied and collected by the Union and may be distributed between the Union and the State.
Rep. by the Constitution (Eightieth Amendment) Act, 2000, sec. 4 (w.e.f. 9-6-2000).]
1. The Union duties of excise including additional duties and any other tax or duty collected and distributed by Central Government as grants-in-aid to States after 1-4-1996 and before 9-6-2000 shall be deemed to be distributed as if before 1-4-1996.
Section 273. Grants in lieu of export duty on jute and jute products.
(1) There shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of the States of Assam, Bihar, Orissa and West Bengal, in lieu of assignment of any share of the net proceeds in each year of export duty on jute and jute products to those States, such sums as may be prescribed.
(2) The sums so prescribed shall continue to be charged on the Consolidated Fund of India so long as any export duty on jute or jute products continues to be levied by the Government of India or until the expiration of ten years from the commencement of this Constitution whichever is earlier.
(3) In this article, the expression “prescribed” has the same meaning as in article 270.
Section 274. Prior recommendation of President required to Bills affecting taxation in which States are interested.
(1) No Bill or amendment which imposes or varies any tax or duty in which States are interested, or which varies the meaning of the expression “agricultural income” as defined for the purposes of the enactments relating to Indian income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surcharge for the purposes of the Union as is mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President.
(2) In this article, the expression “tax or duty in which States are interested” means-
(a) A tax or duty the whole or part of the net proceeds whereof are assigned to any State; or
(b) A tax or duty by reference to the net proceeds whereof sums are for the time being payable out of the Consolidated Fund of India to any State.
Section 275. Grants from the Union to certain States.
(1) Such sums as Parliament may by law provide shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States:
Provided that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of a State such capital and recurring sums as may be necessary to enable that State to meet the costs of such schemes of development as may be undertaken by the State with the approval of the Government of India for the purpose of promoting the welfare of the Scheduled Tribes in that State or raising the level of administration of the Scheduled Areas therein to that of the administration of the rest of the areas of that State:
Provided further that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of the State of Assam sums, capital and recurring, equivalent to-
(a) The average excess of expenditure over the revenues during the two years immediately preceeding the commencement of this Constitution in respect of the administration of the tribal areas specified in 1[Part I] of the Table appended to paragraph 20 of the Sixth Schedule; and
(b) The costs of such schemes of development as may be undertaken by that State with the approval of the Government of India for the purpose of raising the level of administration of the said areas to that of the administration of the rest of the areas of that State.
2[(1A) On and from the formation of the autonomous State under article 244A, -
(i) Any sums payable under clause (a) of the second proviso to clause (1) shall, if the autonomous State comprises all the tribal areas referred to therein, be paid to the autonomous State, and, if the autonomous State comprises only some of those tribal areas, be apportioned between the State of Assam and the autonomous State as the President may, by order, specify;
(ii) There shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of the autonomous State sums, capital and recurring, equivalent to the costs of such schemes of development as may be undertaken by the autonomous State with the approval of the Government of India for the purpose of raising the level of administration of that State to that of the administration of the rest of the State of Assam.]
(2) Until provision is made by Parliament under clause (1), the powers conferred on Parliament under that clause shall be exercisable by the President by order and any order made by the President under this clause shall have effect subject to any provision so made by Parliament:
Provided that after a Finance Commission has been constituted no order shall be made under this clause by the President except after considering the recommendations of the Finance Commission.
1. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for “Part A” (w.e.f. 21-1-1972).
2. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 3.
Section 276. Taxes on professions, trades, callings and employments.
(1) Notwithstanding anything in article 246, no law of the Legislature of a State relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority therein in respect of professions, trades, callings or employments shall be invalid on the ground that it relates to a tax on income.
(2) The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed 1[two thousand and five hundred rupees] per annum.
2[* * * * *]
(3) The power of the Legislature of a State to make laws as aforesaid with respect to taxes on professions, trades, callings and employments shall not be construed as limiting in any way the power of Parliament to make laws with respect to taxes on income accruing from or arising out of professions, trades, callings and employments.
1. Subs. by the Constitution (Sixtieth Amendment) Act, 1988, s. 2, for “two hundred and fifty rupees”.
2. Proviso omitted by s. 2, the Constitution (Sixtieth Amendment) Act, 1988.
Section 277. Savings.
Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law.
Section 278. Agreement with States in Part B of the First Schedule with regard to certain financial matters.
Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 279. Calculation of “net proceeds”, etc.
(1) In the foregoing provisions of this Chapter, “net proceeds” means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.
(2) Subject as aforesaid, and to any other express provision of this Chapter, a law made by Parliament or an order of the President may, in any case where under this Part the proceeds of any duty or tax are, or may be, assigned to any State, provide for the manner in which the proceeds are to be calculated, for the time from or at which and the manner in which any payments are to be made, for the making of adjustments between one financial year and another, and for any other incidental or ancillary matters.
Section 280. Finance Commission.
(1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission which shall consist of a Chairman and four other members to be appointed by the President.
(2) Parliament may by law determine the qualifications, which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected.
(3) It shall be the duty of the Commission to make recommendations to the President as to-
(a) The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds;
(b) The principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
1[(bb) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;]
2[(c) The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;]
3[(d)] Any other matter referred to the Commission by the President in the interests of sound finance.
(4) The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.
1. Ins. by the Constitution (Seventy-third Amendment) Act, 1992, s. 3 (w.e.f. 24-4-1993).
2. Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, s. 3 (w.e.f. 1-6-1993).
3. Sub-cl. (c) re-lettered as sub-cl. (d) by s. 3, the Constitution (Seventy-fourth Amendment) Act, 1992, (w.e.f. 1-6-1993).
Section 281. Recommendations of the Finance Commission.
The President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament.
Miscellaneous Financial Provisions
Section 282. Expenditure defrayable by the Union or a State out of its revenues.
The Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the Legislature of the State, as the case may be.
Section 283. Custody, etc., of Consolidated Funds, Contingency Funds and moneys credited to the public accounts.
(1) The custody of the Consolidated Fund of India and the Contingency Fund of India, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of India, their payment into the public account of India and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by Parliament, and, until provision in that behalf is so made, shall be regulated by rules made by the President.
(2) The custody of the Consolidated Fund of a State and the Contingency Fund of a State, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of the State, their payment into the public account of the State and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by the Legislature of the State, and, until provision in that behalf is so made, shall be regulated by rules made by the Governor 1[***] of the State.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 284. Custody of suitors’ deposits and other moneys received by public servants and courts.
All moneys received by or deposited with-
(a) Any officer employed in connection with the affairs of the Union or of a State in his capacity as such, other than revenues or public moneys raised or received by the Government of India or the Government of the State, as the case may be, or
(b) Any court within the territory of India to the credit of any cause, matter, account or persons,
Shall be paid into the public account of India or the public account of State, as the case may be.
Section 285. Exemption of property of the Union from State taxation.
(1) The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.
(2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.
Section 286. Restrictions as to imposition of tax on the sale or purchase of goods.
(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place-
(a) Outside the State; or
(b) In the course of the import of the goods into, or export of the goods out of, the territory of India.
1[* * * * *]
2[(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1).
3[(3) Any law of a State shall, in so for as it imposes, or authorises the imposition of, -
(a) A tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or
(b) A tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366,
Be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.]]
1. Explanation to clause (1) omitted by the Constitution (Sixth Amendment) Act, 1956, s. 4.
2. Subs. by s. 4, the Constitution (Sixth Amendment) Act, 1956, for cls. (2) and (3).
3. Subs. by the Constitution (Forty-sixth Amendment) Act, 1982, s. 3, for cl. (3).
Section 287. Exemption from taxes on electricity.
Save in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the consumption or sale of electricity (whether produced by a Government or other persons) which is-
(a) Consumed by the Government of India, or sold to the Government of India for consumption by that Government; or
(b) Consumed in the construction, maintenance or operation of any railway by the Government of India or a railway company operating that railway, or sold to that Government or any such railway company for consumption in the construction, maintenance or operation of any railway,
And any such law imposing, or authorising the imposition of, a tax on the sale of electricity shall secure that the price of electricity sold to the Government of India for consumption by that Government, or to any such railway company as aforesaid for consumption in the construction, maintenance or operation of any railway, shall be less by the amount of the tax than the price charged to other consumers of a substantial quantity of electricity.
Section 288. Exemption from taxation by States in respect of water or electricity in certain cases.
(1) Save in so far as the President may by order otherwise provide, no law of a State in force immediately before the commencement of this Constitution shall impose, or authorise the imposition of, a tax in respect of any water or electricity stored, generated, consumed, distributed or sold by any authority established by any existing law or any law made by Parliament for regulating or developing any inter-State river or river-valley.
Explanation. The expression “law of a State in force” in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas.
(2) The Legislature of a State may by law impose, or authorise the imposition of, any such tax as is mentioned in clause (1), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President, received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
Section 289. Exemption of property and income of a State from Union taxation.
(1) The property and income of a State shall be exempt from Union taxation.
(2) Nothing in clause (1) shall prevent the Union from imposing, or authorising the imposition of, any tax to such extent, if any, as Parliament may by law provide in respect of a trade or business of any kind carried on by, or on behalf of, the Government of a State, or any operations connected therewith, or any property used or occupied for the purposes of such trade or business, or any income accruing or arising in connection therewith.
(3) Nothing in clause (2) shall apply to any trade or business, or to any class of trade or business, which Parliament may by law declare to be incidental to the ordinary function.
Section 290. Adjustment in respect of certain expenses and pensions.
Where under the provisions of this Constitution the expenses of any court or Commission, or the pension payable to or in respect of a person who has served before the commencement of this Constitution under the Crown in India or after such commencement in connection with the affairs of the Union or of a State, are charged on the Consolidated Fund of India or the Consolidated Fund of a State, then, if-
(a) In the case of a charge on the Consolidated Fund of India, the court or Commission serves any of the separate needs of a State, or the person has served wholly or in part in connection with the affairs of a State; or
(b) In the case of a charge on the Consolidated Fund of a State, the court or Commission serves any of the separate needs of the Union or another State, or the person has served wholly or in part in connection with the affairs of the Union or another State,
There shall be charged on and paid out of the Consolidated Fund of the State or, as the case may be, the Consolidated Fund of India or the Consolidated Fund of the other State, such contribution in respect of the expenses or pension as may be agreed, or as may in default of agreement be determined by an arbitrator to be appointed by the Chief Justice of India.
Section 290A. Annual payment to certain Devaswom Funds.
1[290A. Annual payment to certain Devaswom Funds.
A sum of forty-six lakhs and fifty thousand rupees shall be charged on, and paid out of, the Consolidated Fund of the State of Kerala every year to the Travancore Devaswom Fund; and a sum of thirteen lakhs and fifty thousand rupees shall be charged on, and paid out of, the Consolidated Fund of the State of 2[Tamil Nadu] every year to the Devaswom Fund established in that State for the maintenance of Hindu temples and shrines in the territories transferred to that State on the 1st day of November, 1956, from the State of Travancore-Cochin].
1. Ins. by by the Constitution (Seventh Amendment) Act, 1956, sec. 19.
2. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 4, for “Madras” (w.e.f. 14-1-1969).
Section 291. Privy purse sums of Rulers.
Rep. by the Constitution (Twenty-sixth Amendment) Act, 197l, s. 2.
Section 292. Borrowing by the Government of India.
The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.
Section 293. Borrowing by States.
(1) Subject to the provisions of this article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed.
(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.
(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.
(4) A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.
Section 294. Succession to property, assets, rights, liabilities and obligations in certain cases.
As from the commencement of this Constitution-
(a) All property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of the Dominion of India and all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of each Governor’s Province shall vest respectively in the Union and the corresponding State, and
(b) All rights, liabilities and obligations of the Government of the Dominion of India and of the Government of each Governor’s Province, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations respectively of the Government of India and the Government of each corresponding State,
Subject to any adjustment made or to be made by reason of the creation before the commencement of this Constitution of the Dominion of Pakistan or of the Provinces of West Bengal, East Bengal, West Punjab and East Punjab.
Section 295. Succession to property, assets, rights, liabilities and obligations in other cases.
(1) As from the commencement of this Constitution-
(a) All property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of the First Schedule shall vest in the Union, if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and
(b) All rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Government of India relating to any of the matters enumerated in the Union List,
Subject to any agreement entered into in that behalf by the Government of India with the Government of that State.
(2) Subject as aforesaid, the Government of each State specified in Part B of the First Schedule shall, as from the commencement of this Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in clause (1).
Section 296. Property accruing by escheat or lapse or as bona vacantia.
Subject as hereinafter provided, any property in the territory of India which, if this Constitution had not come into operation, would have accrued to His Majesty or, as the case may be, to the Ruler of an Indian State by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a State, vest in such State, and shall, in any other case, vest in the Union:
Provided that any property which at the date when it would have so accrued to His Majesty or to the Ruler of an Indian State was in the possession or under the control of the Government of India or the Government of a State shall, according as the purposes for which it was then used or held were purposes of the Union or of a State, vest in the Union or in that State.
Explanation. In this article, the expressions “Ruler” and “Indian State” have the same meanings as in article 363.
Section 297. Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.
1[297. Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.
(1) All lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union.
(2) All other resources of the exclusive economic zone of India shall also vest in the Union and be held for the purposes of the Union.
(3) The limits of the territorial waters, the continental shelf, the exclusive economic zone, and other maritime zones, of India shall be such as may be specified, from time to time, by or under any law made by Parliament.]
1. Subs. by the Constitution (Fortieth Amendment) Act, 1976, sec. 2 for art. 297 (w.e.f. 27-5-1976)
Section 298. Power to carry on trade, etc.
1[298. Power to carry on trade, etc.
The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose:
Provided that-
(a) The said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and
(b) The said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 20 for art. 298.
Section 299. Contracts.
(1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor 1[***] of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor 1[***] by such persons and in such manner as he may direct or authorise.
(2) Neither the President nor the Governor 2[***] shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof.
1. The words “or the Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
2. The words “nor the Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
Section 300. Suits and proceedings.
(1) The Government of India may sue or be sued by the name of the Union of India and the Government of a State may sue or be sued by the name of the State and may, subject to any provisions which may be made by Act of Parliament or of the Legislature of such State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding Provinces or the corresponding Indian States might have sued or been sued if this Constitution had not been enacted.
(2) If at the commencement of this Constitution-
(a) Any legal proceedings are pending to which the Dominion of India is a party, the Union of India shall be deemed to be substituted for the Dominion in those proceedings; and
(b) Any legal proceedings are pending to which a Province or an Indian State is a party, the corresponding State shall be deemed to be substituted for the Province or the Indian State in those proceedings.
Section 300A. Persons not to be deprived of property save by authority of law.
1[Chapter IV Right to Property
No person shall be deprived of his property save by authority of law.]
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, sec. 34 (w.e.f. 20-6-1979).
Section 301. Freedom of trade, commerce and intercourse
Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.
Section 302. Power of Parliament to impose restrictions on trade, commerce and intercourse.
Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest.
Section 303. Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce
(1) Notwithstanding anything in article 302, neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.
(2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
Section 304. Restrictions on trade, commerce and intercourse among States
Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law-
(a) Impose on goods imported from other States 1[or the Union territories] any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and
(b) Impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interests:
Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
1. Ins. by the Constitution (Seventh Amendment) Act, 1956, sec. 29.
Section 305. Saving of existing laws and laws providing for State monopolies
1[305. Saving of existing laws and laws providing for State monopolies.
Nothing in articles 301 and 303 shall affect the provisions of any existing law except in so far as the President may by order otherwise direct; and nothing in article 301 shall affect the operation of any law made before the commencement of the Constitution (Fourth Amendment) Act, 1955, in so far as it relates to, or prevent Parliament or the Legislature of a State from making any law relating to, any such matter as is referred to in sub-clause (ii) of clause (6) of article 19.]
1. Subs. by the Constitution (Fourth Amendment) Act, 1955, sec. 4 for art. 305.
Section 306. Power of certain States in Part B of the First Schedule to impose restrictions on trade and commerce
Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 307. Appointment of authority for carrying out the purposes of articles 301 to 304
Parliament may by law appoint such authority as it considers appropriate for carrying out the purposes of articles 301, 302, 303 and 304, and confer on the authority so appointed such powers and such duties as it thinks necessary.
Section 308. Interpretation
In this Part, unless the context otherwise requires, the expression “State” 1[does not include the State of Jammu and Kashmir].
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. for “means a State specified in Part A or Part B of the First Schedule”.
Section 309. Recruitment and conditions of service of persons serving the Union or a State
Subject to the provisions of this Constitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State:
Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor 1[***] of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate Legislature under this article, and any rules so made shall have effect subject to the provisions of any such Act.
1. The words “or Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
Section 310. Tenure of office of persons serving the Union or a State
(1) Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an all-India service or holds any post connected with defence or any civil post under the Union holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor 1[***] of the State.
(2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor 2[***] of the State, any contract under which a person, not being a member of a defence service or of an all-India service or of a civil service of the Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor 3[***], as the case may be, deems it necessary in order to secure the services of a person having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post.
1. The words “or, as the case may be, the Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
2. The words “or Rajpramukh” omitted by s. 29 and Sch. the Constitution (Seventh Amendment) Act, 1956.
3. The words “or the Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
Section 311. Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State
(1) No person who is a member of a civil service of the Union or an all-India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
1[(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges 2[***]:
3[Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed:
Provided further that this clause shall not apply-]
(a) Where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; or
(b) Where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry; or
(c) Where the President or the Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry.
(3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.]
1. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 10, for cls. (2) and (3).
2. Certain words omitted by the Constitution (Forty-second Amendment) Act, 1976, s. 44 (w.e.f. 3-1-1977).
3. Subs. by s. 44, the Constitution (Forty-second Amendment) Act, 1976, for certain words (w.e.f. 3-1-1977).
Section 312. All-India services
(1) Notwithstanding anything in 1[Chapter VI of Part VI or Part XI], if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest so to do, Parliament may by law provide for the creation of one or more all India services 2[(including an all-India judicial service)] common to the Union and the States, and, subject to the other provisions of this Chapter, regulate the recruitment, and the conditions of service of persons appointed, to any such service.
(2) The services known at the commencement of this Constitution as the Indian Administrative Service and the Indian Police Service shall be deemed to be services created by Parliament under this article.
2[(3) The all-India judicial service referred to in clause (1) shall not include any post inferior to that of a district judge as defined in article 236.
(4) The law providing for the creation of the all-India judicial service aforesaid may contain such provisions for the amendment of Chapter VI of Part VI as may be necessary for giving effect to the provisions of that law and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368.]
1. Subs. by s. 45, the Constitution (Forty-second Amendment) Act, 1976, for “Part-XI” (w.e.f. 3-1-1977).
2. Ins. by s. 45, the Constitution (Forty-second Amendment) Act, 1976, (w.e.f. 3-1-1977).
Section 312A. Power of Parliament to vary or revoke conditions of service of officers of certain services
1[312A. Power of Parliament to vary or revoke conditions of service of officers of certain services.
(1) Parliament may by law-
(a) Vary or revoke, whether prospectively or retrospectively, the conditions of services as respects remuneration, leave and pension and the rights as respects disciplinary matters of persons who, having been appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India before the commencement of this Constitution, continue on and after the commencement of the Constitution (Twenty-eighth Amendment) Act, 1972, to serve under the Government of India or of a State in any service or post;
(b) Vary or revoke, whether prospectively or retrospectively, the conditions of service as respects pension of persons who, having been appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India before the commencement of this Constitution, retired or otherwise ceased to be in service at any time before the commencement of the Constitution (Twenty-eighth Amendment) Act, 1972:
Provided that in the case of any such person who is holding or has held the office of the Chief Justice or other Judge of the Supreme Court or a High Court, the Comptroller and Auditor-General of India, the Chairman or other member of the Union or a State Public Service Commission or the Chief Election Commissioner, nothing in sub-clause (a) or sub-clause (b) shall be construed as empowering Parliament to vary or revoke, after his appointment to such post, the conditions of his service to his disadvantage except in so far as such conditions of service are applicable to him by reason of his being a person appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India.
(2) Except to the extent provided for by Parliament by law under this article, nothing in this article shall affect the power of any Legislature or other authority under any other provision of this Constitution to regulate the conditions of service of persons referred to in clause (1).
(3) Neither the Supreme Court nor any other court shall have jurisdiction in-
(a) Any dispute arising out of any provision of, or any endorsement on, any covenant, agreement or other similar instrument which was entered into or executed by any person referred to in clause (1), or arising out of any letter issued to such person, in relation to his appointment to any civil service of the Crown in India or his continuance in service under the Government of the Dominion of India or a Province thereof;
(b) Any dispute in respect of any right, liability or obligation under article 314 as originally enacted.
(4) The provisions of this article shall have effect notwithstanding anything in article 314 as originally enacted or in any other provision of this Constitution.]
1. Ins. by the Constitution (Twenty-eighth Amendment) Act, 1972, sec. 2 (w.e.f. 29-8-1972).
Section 313. Transitional provisions
Until other provision is made in this behalf under this Constitution, all the laws in force immediately before the commencement of this Constitution and applicable to any public service or any post which continues to exist after the commencement of this Constitution, as an all-India service or as service or post under the Union or a State shall continue in force so far as consistent with the provisions of this Constitution.
Section 314. Provision for protection of existing officers of certain services
Rep. by the Constitution (Twenty-eighth Amendment) Act, 1972, s. 3 (w.e.f. 29-8-1972).
Section 315. Public Service Commissions for the Union and for the States
(1) Subject to the provisions of this article, there shall be a Public Service Commission for the Union and a Public Service Commission for each State.
(2) Two or more States may agree that there shall be one Public Service Commission for that group of States, and if a resolution to that effect is passed by the House or, where there are two Houses, by each House of the Legislature of each of those States, Parliament may by law provide for the appointment of a Joint State Public Service Commission (referred to in this Chapter as Joint Commission) to serve the needs of those States.
(3) Any such law as aforesaid may contain such incidental and consequential provisions as may be necessary or desirable for giving effect to the purposes of the law.
(4) The Public Service Commission for the Union, if requested so to do by the Governor 1[***] of a State, may, with the approval of the President, agree to serve all or any of the needs of the State.
(5) References in this Constitution to the Union Public Service Commission or a State Public Service Commission shall, unless the context otherwise requires, be construed as references to the Commission serving the needs of the Union or, as the case may be, the State as respects the particular matter in question.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 316. Appointment and term of office of members
(1) The Chairman and other members of a Public Service Commission shall be appointed, in the case of the Union Commission or a Joint Commission, by the President, and in the case of a State Commission, by the Governor 1[***] of the State:
Provided that as nearly as may be one-half of the members of every Public Service Commission shall be persons who at the dates of their respective appointments have held office for at least ten years either under the Government of India or under the Government of a State, and in computing the said period of ten years any period before the commencement of this Constitution during which a person has held office under the Crown in India or under the Government of an Indian State shall be included.
2[(1A) If the office of the Chairman of the Commission becomes vacant or if any such Chairman is by reason of absence or for any other reason unable to perform the duties of his office, those duties shall, until some person appointed under clause (1) to the vacant office has entered on the duties thereof or, as the case may be, until the Chairman has resumed his duties, be performed by such one of the other members of the Commission as the President, in the case of the Union Commission or a Joint Commission, and the Governor of the State in the case of a State Commission, may appoint for the purpose.]
(2) A member of a Public Service Commission shall hold office for a term of six years from the date on which he enters upon his office or until he attains, in the case of the Union Commission, the age of sixty-five years, and in the case of a State Commission or a Joint Commission, the age of 3[sixty-two years], whichever is earlier:
Provided that-
(a) A member of a Public Service Commission may, by writing under his hand addressed, in the case of the Union Commission or a Joint Commission, to the President, and in the case of a State Commission, to the Governor 3[***] of the State, resign his office;
(b) A member of a Public Service Commission may be removed from his office in the manner provided in clause (1) or clause (3) of article 317.
(3) A person who holds office as a member of a Public Service Commission shall, on the expiration of his term of office, be ineligible for re-appointment to that office.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 11.
3. Subs. by the Constitution (Forty-first Amendment) Act, 1976, s. 2, for “sixty years”.
Section 317. Removal and suspension of a member of a Public Service Commission
(1) Subject to the provisions of clause (3), the Chairman or any other member of a Public Service Commission shall only be removed from his office by order of the President on the ground of misbehaviour after the Supreme Court, on reference being made to it by the President, has, on inquiry held in accordance with the procedure prescribed in that behalf under article 145, reported that the Chairman or such other member, as the case may be, ought on any such ground to be removed.
(2) The President, in the case of the Union Commission or a Joint Commission, and the Governor 1[***] in the case of a State Commission, may suspend from office the Chairman or any other member of the Commission in respect of whom a reference has been made to the Supreme Court under clause (1) until the President has passed orders on receipt of the report of the Supreme Court on such reference.
(3) Notwithstanding anything in clause (1), the President may by order remove from office the Chairman or any other member of a Public Service Commission if the Chairman or such other member, as the case may be, -
(a) Is adjudged an insolvent; or
(b) Engages during his term of office in any paid employment outside the duties of his office; or
(c) Is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body.
(4) If the Chairman or any other member of a Public Service Commission is or becomes in any way concerned or interested in any contract or agreement made by or on behalf of the Government of India or the Government of a State or participates in any way in the profit thereof or in any benefit or emolument arising therefrom otherwise than as a member and in common with the other members of an incorporated company, he shall, for the purposes of clause (1), be deemed to be guilty of misbehaviour.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and sch.
Section 318. Power to make regulations as to conditions of service of members and staff of the Commission
In the case of the Union Commission or a Joint Commission, the President and, in the case of a State Commission, the Governor 1[****] of the State may by regulations-
(a) Determine the number of members of the Commission and their conditions of service; and
(b) Make provision with respect to the number of members of the staff of the Commission and their conditions of service:
Provided that the conditions of service of a member of a Public Service Commission shall not be varied to his disadvantage after his appointment.
1. The word “or Rapramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and sch.
Section 319. Prohibition as to the holding of offices by members of Commission on ceasing to be such members
On ceasing to hold office-
(a) The Chairman of the Union Public Service Commission shall be ineligible for further employment either under the Government of India or under the Government of a State;
(b) The Chairman of a State Public Service Commission shall be eligible for appointment as the Chairman or any other member of the Union Public Service Commission or as the Chairman of any other State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State;
(c) A member other than the Chairman of the Union Public Service Commission shall be eligible for appointment as the Chairman of the Union Public Service Commission or as the Chairman of a State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State;
(d) A member other than the Chairman of a State Public Service Commission shall be eligible for appointment as the Chairman or any other member of the Union Public Service Commission or as the Chairman of that or any other State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State.
Section 320. Functions of Public Service Commissions
(1) It shall be the duty of the Union and the State Public Service Commissions to conduct examinations for appointments to the services of the Union and the services of the State respectively.
(2) It shall also be the duty of the Union Public Service Commission, if requested by any two or more States so to do, to assist those States in framing and operating schemes of joint recruitment for any services for which candidates possessing special qualifications are required.
(3) The Union Public Service Commission or the State Public Service Commission, as the case may be, shall be consulted-
(a) On all matters relating to methods of recruitment to civil services and for civil posts;
(b) On the principles to be followed in making appointments to civil services and posts and in making promotions and transfers from one service to another and on the suitability of candidates for such appointments, promotions or transfers;
(c) On all disciplinary matters affecting a person serving under the Government of India or the Government of a State in a civil capacity, including memorials or petitions relating to such matters;
(d) On any claim by or in respect of a person who is serving or has served under the Government of India or the Government of a State or under the Crown in India or under the Government of an Indian State, in a civil capacity, that any costs incurred by him in defending legal proceedings instituted against him in respect of acts done or purporting to be done in the execution of his duty should be paid out of the Consolidated Fund of India, or, as the case may be, out of the Consolidated Fund of the State;
(e) On any claim for the award of a pension in respect of injuries sustained by a person while serving under the Government of India or the Government of a State or under the Crown in India or under the Government of an Indian State, in a civil capacity, and any question as to the amount of any such award,
And it shall be the duty of a Public Service Commission to advise on any matter so referred to them and on any other matter which the President, or, as the case may be, the Governor 1[***] of the State, may refer to them:
Provided that the President as respects the all-India services and also as respects other services and posts in connection with the affairs of the Union, and the Governor 2[***], as respects other services and posts in connection with the affairs of a State, may make regulations specifying the matters in which either generally, or in any particular class of case or in any particular circumstances, it shall not be necessary for a Public Service Commission to be consulted.
(4) Nothing in clause (3) shall require a Public Service Commission to be consulted as respects the manner in which any provision referred to in clause (4) of article 16 may be made or as respects the manner in which effect may be given to the provisions of article 335.
(5) All regulations made under the proviso to clause (3) by the President or the Governor 1[***] of a State shall be laid for not less than fourteen days before each House of Parliament or the House or each House of the Legislature of the State, as the case may be, as soon as possible after they are made, and shall be subject to such modifications, whether by way of repeal or amendment, as both Houses of Parliament or the House or both Houses of the Legislature of the State may make during the session in which they are so laid.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. The words “or Rajpramukh, as the case may be” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 321. Power to extend functions of Public Service Commissions
An Act made by Parliament or, as the case may be, the Legislature of a State may provide for the exercise of additional functions by the Union Public Service Commission or the State Public Service Commission as respects the services of the Union or the State and also as respects the services of any local authority or other body corporate constituted by law or of any public institution.
Section 322. Expenses of Public Service Commissions
The expenses of the Union or a State Public Service Commission, including any salaries, allowances and pensions payable to or in respect of the members or staff of the Commission, shall be charged on the Consolidated Fund of India or, as the case may be, the Consolidated Fund of the State.
Section 323. Reports of Public Service Commissions
(1) It shall be the duty of the Union Commission to present annually to the President a report as to the work done by the Commission and on receipt of such report the President shall cause a copy thereof together with a memorandum explaining, as respects the cases, if any, where the advice of the Commission was not accepted, the reasons for such non-acceptance to be laid before each House of Parliament.
(2) It shall be the duty of a State Commission to present annually to the Governor 1[***] of the State a report as to the work done by the Commission, and it shall be the duty of a Joint Commission to present annually to the Governor 1[***] of each of the States the needs of which are served by the Joint Commission a report as to the work done by the Commission in relation to that State, and in either case the Governor 2[***], shall, on receipt of such report, cause a copy thereof together with a memorandum explaining, as respects the cases, if any, where the advice of the Commission was not accepted, the reasons for such non-acceptance to be laid before the Legislature of the State.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. The words “or Rajpramukh, as the case may be” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 323A. Administrative tribunals
1[PART XIVA TRIBUNALS
(1) Parliament may, by law, provide for the adjudication or trial by administrative tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India or of any corporation owned or controlled by the Government.
(2) A law made under clause (1) may-
(a) Provide for the establishment of an administrative tribunal for the Union and a separate administrative tribunal for each State or for two or more States;
(b) Specify the jurisdiction, powers (including the power to punish for contempt) and authority, which may be exercised by each of the said tribunals;
(c) Provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) Exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court under article 136, with respect to the disputes or complaints referred to in clause (1);
(e) Provide for the transfer to each such administrative tribunal of any cases pending before any court or other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) Repeal or amend any order made by the President under clause (3) of article 371D;
(g) Contain such supplemental, incidental and consequential provisions (including provisions as to fees) as Parliament may deem necessary for the effective functioning of, and for the speedy disposal of cases by, and the enforcement of the orders of, such tribunals.
(3) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 46 (w.e.f. 3-1-1977).
Section 323B. Tribunals for other matters
*[323B. Tribunals for other matters.—(1) The appropriate Legislature may, by law, provide for the adjudication or trial by tribunals of any disputes, complaints, or offences with respect to all or any of the matters specified in clause (2) with respect to which such Legislature has power to make laws.
(2) The matters referred to in clause (1) are the following, namely:—
(a) levy, assessment, collection and enforcement of any tax;
(b) foreign exchange, import and export across customs frontiers;
(c) industrial and labour disputes;
(d) land reforms by way of acquisition by the State of any estate as defined in article 31A or of any rights therein or the extinguishment or modification of any such rights or by way of ceiling on agricultural land or in any other way;
(e) ceiling on urban property;
(f) elections to either House of Parliament or the House or either House of the Legislature of a State, but excluding the matters referred to in article 329 and article 329A;
(g) production, procurement, supply and distribution of foodstuffs (including edible oilseeds and oils) and such other goods as the President may, by public notification, declare to be essential goods for the purpose of this article and control of prices of such goods;
1[(h) rent, its regulation and control and tenancy issues including the rights, title and interest of landlords and tenants,]
2[(i)] offences against laws with respect to any of the matters specified in sub-clauses (a) to 3[(h)] and fees in respect of any of those matters;
2[(j)] any matter incidental to any of the matters specified in sub-clauses (a) to 4[(i)].
(3) A law made under clause (1) may—
(a) provide for the establishment of a hierarchy of tribunals;
(b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals;
(c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) exclude the jurisdiction of all courts except the jurisdiction of the Supreme Court under article 136 with respect to all or any of the matters falling within the jurisdiction of the said tribunals;
(e) provide for the transfer to each such tribunal of any cases pending before any court or any other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as the appropriate Legislature may deem necessary for the effective functioning of, and for the speedy disposal of cases by, and the enforcement of the orders of, such tribunals.
(4) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
Explanation.—In this article, “appropriate Legislature”, in relation to any matter, means Parliament or, as the case may be, a State Legislature competent to make laws with respect to such matter in accordance with the provisions of Part XI.]
* Ins. by the Constitution (Forty-second Amendment) Act, 1976, sec. 46 (w.e.f. 3-1-1977).
1. Ins. by the Constitution (Seventy-fifth Amendment) Act, 1993, sec. 2 (w.e.f. 15.5.1994).
2. Sub-clauses (h) and (i) relettered as sub-clause (i) and (j) by the Constitution (Seventy-fifth Amendment) Act, 1993, sec. 2 (w.e.f. 15-5-1994)
3. Subs. by the Constitution (Seventy-fifth Amendment) Act, 1993 sec. 2 for “(g) ” w.e.f. from 15-5-1994.
4. Subs. by the Constitution (Seventy-fifth Amendment) Act, 1993 sec. 2 for “(h) ” w.e.f. from 15-5-1994.
Section 324. Superintendence, direction and control of elections to be vested in an Election Commission
(1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice-President held under this Constitution 1[***] shall be vested in a Commission (referred to in this Constitution as the Election Commission).
(2) The Election Commission shall consist of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix and the appointment of the Chief Election Commissioner and other Election Commissioners shall, subject to the provisions of any law made in that behalf by Parliament, be made by the President.
(3) When any other Election Commissioner is so appointed the Chief Election Commissioner shall act as the Chairman of the Election Commission.
(4) Before each general election to the House of the People and to the Legislative Assembly of each State, and before the first general election and thereafter before each biennial election to the Legislative Council of each State having such Council, the President may also appoint after consultation with the Election Commission such Regional Commissioners as he may consider necessary to assist the Election Commission in the performance of the functions conferred on the Commission by clause (1).
(5) Subject to the provisions of any law made by Parliament, the conditions of service and tenure of office of the Election Commissioners and the Regional Commissioners shall be such as the President may by rule determine:
Provided that the Chief Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a Judge of the Supreme Court and the conditions of service of the Chief Election Commissioner shall not be varied to his disadvantage after his appointment:
Provided further that any other Election Commissioner or a Regional Commissioner shall not be removed from office except on the recommendation of the Chief Election Commissioner.
(6) The President, or the Governor 2[***] of a State, shall, when so requested by the Election Commission, make available to the Election Commission or to a Regional Commissioner such staff as may be necessary for the discharge of the functions conferred on the Election Commission by clause (1).
1. The words “including the appointment of election tribunals for the decision of doubts and disputes arising out of or in connection with elections to Parliament and to the Legislatures of States” omitted by the Constitution (Nineteenth Amendment) Act, 1966, s. 2.
2. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s.29 and Sch.
Section 325. No person to be ineligible for inclusion in, or to claim to be included in a special, electoral roll on grounds of religion, race, caste or sex
There shall be one general electoral roll for every territorial constituency for election to either House of Parliament or to the House or either House of the Legislature of a State and no person shall be ineligible for inclusion in any such roll or claim to be included in any special electoral roll for any such constituency on grounds only of religion, race, caste, sex or any of them.
Section 326. Elections to the House of the People and to the Legislative Assemblies of States to be on the basis of adult suffrage
The elections to the House of the People and to the Legislative Assembly of every State shall be on the basis of adult suffrage; that is to say, every person who is a citizen of India and who is not less than 1[eighteen years] of age on such date as may be fixed in that behalf by or under any law made by the appropriate Legislature and is not otherwise disqualified under this Constitution or any law made by the appropriate Legislature on the ground of non-residence, unsoundness of mind, crime or corrupt or illegal practice, shall be entitled to be registered as a voter at any such election.
1. Subs. by the Constitution (Sixty-first Amendment) Act, 1988, s. 2, for “twenty-one years”.
Section 327. Power of Parliament to make provision with respect to elections to Legislatures
Subject to the provisions of this Constitution, Parliament may from time to time by law make provision with respect to all matters relating to, or in connection with, elections to either House of Parliament or to the House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of constituencies and all other matters necessary for securing the due constitution of such House or Houses.
Section 328. Power of Legislature of a State to make provision with respect to elections to such Legislature
Subject to the provisions of this Constitution and in so far as provision in that behalf is not made by Parliament, the Legislature of a State may from time to time by law make provision with respect to all matters relating to, or in connection with, the elections to the House or either House of the Legislature of the State including the preparation of electoral rolls and all other matters necessary for securing the due constitution of such House or Houses.
Section 329. Bar to interference by courts in electoral matters
1[Notwithstanding anything in this Constitution 2[***]-]
(a) The validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 327 or article 328, shall not be called in question in any court;
(b) No election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature.
1. Subs. by the Constitution (Thirty-ninth Amendment) Act, 1975, s. 3, for certain words.
2. he words, figures and letter “but subject to the provisions of article 329A” omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 35 (w.e.f. 20-6-1979).
Section 329A. Special provision as to elections to Parliament in the case of Prime Minister and Speaker
1[329A. Special provision as to elections to Parliament in the case of Prime Minister and Speaker.
Rep. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 36 (w.e.f. 20-6-1979).
1. Ins.by the Constitution (Thirty-ninth Amendment) Act, 1975, sec. 4.
Section 330. Reservation of seats for Scheduled Castes and Scheduled Tribes in the House of the People
(1) Seats shall be reserved in the House of the People for-
(a) The Scheduled Castes;
1[(b) The Scheduled Tribes except the Scheduled Tribes in the autonomous districts of Assam; and]
(c) The Scheduled Tribes in the autonomous districts of Assam.
(2) The number of seats reserved in any State 2[or Union territory] for the Scheduled Castes or the Scheduled Tribes under clause (1) shall bear, as nearly as may be, the same proportion to the total number of seats allotted to that State 7[or Union territory] in the House of the People as the population of the Scheduled Castes in the State 2[or Union territory] or of the Scheduled Tribes in the State 2[or Union territory] or part of the State 7[or Union territory], as the case may be, in respect of which seats are so reserved, bears to the total population of the State 2[or Union territory].
3[(3) Notwithstanding anything contained in clause (2), the number of seats reserved in the House of the People for the Scheduled Tribes in the autonomous districts of Assam shall bear to the total number of seats allotted to that State a proportion not less than the population of the Scheduled Tribes in the said autonomous districts bears to the total population of the State.]
4[Explanation. In this article and in article 332, the expression “population” means the population as ascertained at the last preceding census of which the relevant figures have been published:
Provided that the reference in this Explanation to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 5[2026] have been published, be construed as a reference to the 6[2001] census.]
1. Subs. by the Constitution (Fifty-first Amendment) Act, 1984, s. 2, for sub-clause (b) (w.e.f. 16-6-1986).
2. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
3. Ins. by the Constitution (Thirty-first Amendment) Act, 1973, s. 3. (w.e.f. 17-10-1973)
4. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 47 (w.e.f. 3-1-1977).
5. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 6, for “2000” (w.e.f. 21-2-2002).
6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 6, for “1971” w.e.f. 21-2-2002 and ahain subs. by the Constitution (Eighty-seventh Amendment) Act, 2003, for ‘1991’ w.e.f. 22-6-2003.
7. Ins. by the Constitution (Thirty-ninth Amendment) Act, 1975, sec. 4.
Section 331. Representation of the Anglo-Indian Community in the House of the People
Notwithstanding anything in article 81, the President may, if he is of opinion that the Anglo-Indian community is not adequately represented in the House of the People, nominate not more than two members of that community to the House of the People.
Section 332. Reservation of seats for Scheduled Castes and Scheduled Tribes in the Legislative Assemblies of the States
(1) Seats shall be reserved for the Scheduled Castes and the Scheduled Tribes, 1[except the Scheduled Tribes in the autonomous districts of Assam], in the Legislative Assembly of every State 2[***].
(2) Seats shall be reserved also for the autonomous districts in the Legislative Assembly of the State of Assam.
(3) The number of seats reserved for the Scheduled Castes or the Scheduled Tribes in the Legislative Assembly of any State under clause (1) shall bear, as nearly as may be, the same proportion to the total number of seats in the Assembly as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State or part of the State, as the case may be, in respect of which seats are so reserved bears to the total population of the State.
3[(3A) Notwithstanding anything contained in clause (3), until the taking effect, under article 170, of the re-adjustment, on the basis of the first census after the year 7[2026], of the number of seats in the Legislative Assemblies of the States of Arunachal Pradesh, Meghalaya, Mizoram and Nagaland, the seats which shall be reserved for the Scheduled Tribes in the Legislative Assembly of any such State shall be—
(a) if all the seats in the Legislative Assembly of such State in existence on the date of coming into force of the Constitution (Fifty-seventh Amendment) Act, 1987 (hereafter in this clause referred to as the existing Assembly) are held by members of the Scheduled Tribes, all the seats except one;
(b) in any other case, such number of seats as bears to the total number of seats, a proportion not less than the number (as on the said date) of members belonging to the Scheduled Tribes in the existing Assembly bears to the total number of seats in existing Assembly.]
5[(3B) Notwithstanding anything contained in clause (3), until the re-adjustment, under article 170, takes effect on the basis of the first census after the year 6[2026], of the number of seats in the Legislative Assembly of the State of Tripura, the seats which shall be, such number of seats as bears to the total number of seats, a proportion not less than the number, as on the date of coming into force of the Constitution (Seventy-second Amendment) Act, 1992, of members belonging to the Scheduled Tribes in the Legislative Assembly in existence on the said date bears to the total number of seats in that Assembly.]
(4) The number of seats reserved for an autonomous district in the Legislative Assembly of the State of Assam shall bear to the total number of seats in that Assembly a proportion not less than the population of the district bears to the total population of the State.
(5) The constituencies for the seats reserved for any autonomous district of Assam shall not comprise any area outside that district 7[***].
(6) No person who is not a member of a Scheduled Tribe of any autonomous district of the State of Assam shall be eligible for election to the Legislative Assembly of the State from any constituency of that district 7[***]:
8[Provided that for elections to the Legislative Assembly of the State of Assam, the representation of the Scheduled Tribes and non-Scheduled Tribes in the constituencies included in the Bodoland Territorial Areas District, so notified, and existing prior to the constitution of the Bodoland Territorial Areas District, shall be maintained.]
—————————–
1. Subs. by the Constitution (Fifty-first Amendment) Act, 1984, sec. 3, for certain words (w.e.f. 16-6-1986).
2. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
3. Ins. by the Constitution (Fifty-seventh Amendment) Act, 1987, sec. 2 (w.e.f. 21-9-1987).
4. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 7, for “2000” (w.e.f. 21-2-2002).
5. Ins. by the Constitution (Seventy-second Amendment) Act, 1992, sec. 2 (w.e.f. 5-12-1992).
6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, sec. 7, for “2000” (w.e.f. 21-2-2002).
7. Certain words omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) (w.e.f. 21-1-1972).
8. Ins. by the Constitution (Ninetieth Amendment) Act, 2003, sec. 2 (w.e.f. 28-9-2003).
Section 333. Representation of the Anglo-Indian community in the Legislative Assemblies of the States
Notwithstanding anything in article 170, the Governor 1[***] of a State may, if he is of opinion that the Anglo-Indian community needs representation in the Legislative Assembly of the State and is not adequately represented therein, 2[nominate one member of that community to the Assembly.]
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by the Constitution (Twenty-third Amendment) Act, 1969, s. 4, for “nominate such number of members of the community to the Assembly as he considers appropriate”.
Section 334. Reservation of seats and special representation to cease after sixty years
334. Reservation of seats and special representation to cease after 1[sixty years].
Notwithstanding anything in the foregoing provisions of this Part, the provisions of this Constitution relating to-
(a) The reservation of seats for the Scheduled Castes and the Scheduled Tribes in the House of the People and in the Legislative Assemblies of the States; and
(b) The representation of the Anglo-Indian community in the House of the People and in the Legislative Assemblies of the States by nomination,
Shall cease to have effect on the expiration of a period of 1[sixty years] from the commencement of this Constitution:
Provided that nothing in this article shall affect any representation in the House of the People or in the Legislative Assembly of a State until the dissolution of the then existing House or Assembly, as the case may be.
1. Successively subs by the Constitution (Sixty-second Amendment) Act, 1989, s.2 for the words ‘forty years’ (w.e.f. 20.12.1989) and by the Constitution (Seventy-ninth Amendment) Act 1999, s.2 for the words ‘fifty years’(w.e.f. 25.1.2000)
Section 335. Claims of Scheduled Castes and Scheduled Tribes to services and posts
The claims of the members of the Scheduled Castes and Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State.
1[Provided that nothing in this article shall prevent in making of any provision in favour of the members of the Scheduled Castes and Scheduled Tribes for relaxation in qualifying marks in any examination or lowering the standards of evaluation, for reservation in matters of promotion to any class or classes of services or posts in connection with the affairs of the Union or the State].
1. Ins. By the Constitution (Eighty-second Amendment), sec. 2 (w.e.f. 8-9-2000).
Section 336. Special provision for Anglo-Indian community in certain services
(1) During the first two years after the commencement of this Constitution, appointments of members of the Anglo-Indian community to posts in the railway, customs, postal and telegraph services of the Union shall be made on the same basis as immediately before the fifteenth day of August, 1947.
During every succeeding period of two years, the number of posts reserved for the members of the said community in the said services shall, as nearly as possible, be less by ten per cent. than the numbers so reserved during the immediately preceding period of two years:
Provided that at the end of ten years from the commencement of this Constitution all such reservations shall cease.
(2) Nothing in clause (1) shall bar the appointment of members of the Anglo-Indian community to posts other than, or in addition to, those reserved for the community under that clause if such members are found qualified for appointment on merit as compared with the members of other communities.
Section 337. Special provision with respect to educational grants for the benefit of Anglo-Indian community
During the first three financial years after the commencement of this Constitution, the same grants, if any, shall be made by the Union and by each State 1[***] for the benefit of the Anglo-Indian community in respect of education as were made in the financial year ending on the thirty-first day of March, 1948.
During every succeeding period of three years the grants may be less by ten per cent. than those for the immediately preceding period of three years:
Provided that at the end of ten years from the commencement of this Constitution such grants, to the extent to which they are a special concession to the Anglo-Indian community, shall cease:
Provided further that no educational institution shall be entitled to receive any grant under this article unless at least forty per cent. of the annual admissions therein are made available to members of communities other than the Anglo-Indian community.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 338. National Commission for Scheduled Castes
338. 1[National Commission for Scheduled Castes.]
2[3[(1) There shall be a Commission for the Scheduled Castes to be known as the National Commission for the Scheduled Castes.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Commission shall consist of a Chairperson, Vice-Chairperson and three other Members and the conditions of service and tenure of office of the Chairperson, Vice-Chairperson and other Members so appointed shall be such as the President may by rule determine.]
(3) The Chairperson, Vice-Chairperson and other Members of the Commission shall be appointed by the President by warrant under his hand and seal.
(4) The Commission shall have the power to regulate its own procedure.
(5) It shall be the duty of the Commission-
(a) To investigate and monitor all matters relating to the safeguards provided for the Scheduled Castes 4[* * *] under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;
(b) To inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Castes 4[* * *];
(c) To participate and advise on the planning process of socio-economic development of the Scheduled Castes 4[* * *] and to evaluate the progress of their development under the Union and any State;
(d) To present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards;
(e) To make in such reports recommendations as to the measures that should be taken by the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare and socio-economic development of the Scheduled Castes 4[* * *]; and
(f) To discharge such other functions in relation to the protection, welfare, development, and advancement of the Scheduled Castes 4[* * *] as the President may, subject to the provisions of any law made by Parliament, by rule specify.
(6) The President shall cause all such reports to be laid before each House of Parliament along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the Union and the reasons for the non-acceptance, if any, of any of such recommendations.
(7) Where any such report, or any part thereof, relates to any matter with which any State Government is concerned, a copy of such report shall be forwarded to the Governor of the State who shall cause it to be laid before the Legislature of the State along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the State and the reasons for the non-acceptance, if any, of any of such recommendations.
(8) The Commission shall, while investigating any matter referred to in sub-clause (a) or inquiring into any complaint referred to in sub-clause (b) of clause (5), have all the powers of a civil court trying a suit and in particular in respect of the following matters, namely: -
(a) Summoning and enforcing the attendance of any person from any part of India and examining him on oath;
(b) Requiring the discovery and production of any document;
(c) Receiving evidence on affidavits;
(d) Requisitioning any public record or copy thereof from any court or office;
(e) Issuing commissions for the examination of witnesses and documents;
(f) Any other matter which the President may, by rule, determine.
(9) The Union and every State Government shall consult the Commission on all major policy matters affecting Scheduled Castes 4[* * *].]
5[(10)] In this article, references to the Scheduled Castes 4[* * *] shall be construed as including references to such other backward classes as the President may, on receipt of the report of a Commission appointed under clause (1) of article 340, by order specify and also to the Anglo-Indian community.
1. Subs. by the Constitution (Sixty-fifth Amendment) Act, 1990, sec. 2, (w.e.f. 22-3-1992) and again subs. by the Constitution (Eighty-ninth Amendment) Act, 2003, sec. 2 for the marginal heading “National Commission for Scheduled Caste and Scheduled Tribles” (w.e.f. 19-2-2004).
2. Subs. by the Constitution (Sixty-fifth Amendment) Act, 1990, sec. 2 for clauses (1) and (2) (w.e.f. 22-3-1992).
3. Subs. by the Constitution (Eighty-ninth Amendment) Act, 2003, s. 2 for clauses (1) and (2) (w.e.f. 19-2-2004).
4. The words “and Scheduled Tribes” omitted by the Constitution (Eighty-ninth Amendment) Act, 2003, sec. 2 (w.e.f. 19-2-2004).
5. Clause (3) renumbered as clause (10) by the Constitution (Sixty-fifth Amendment) Act, 1990, sec. 2 (w.e.f. 22-3-1992).
Section 338A. National Commission for Scheduled Tribes
1[338A. National Commission for Scheduled Tribes
(1) There shall be a Commission for the Scheduled Tribes to be known as Commission the National Commission for the Scheduled Tribes.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Commission shall consist of a Chairperson, Vice-Chairperson and three other Members and the conditions of service and tenure of office of the Chairperson, Vice-Chairperson and other Members so appointed shall be such as the President may by rule determine.
(3) The Chairperson. Vice-Chairperson and other Members of the Commission shall be appointed by the President by warrant under his hand and seal.
(4) The Commission shall have the power to regulate its own procedure.
(5) It shall be the duty of the Commission-
(a) to investigate and monitor all matters relating to the safeguards provided for the Scheduled Tribes under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;
(b) to inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Tribes;
(c) to participate and advise on the planning process of socio-economic development of the Scheduled Tribes and to evaluate the progress of their development under the Union and any State;
(d) to present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards;
(e) to make in such reports recommendations as to the measures that should be taken by the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare .and socio-economic development of the Scheduled Tribes; and
(f) to discharge such other functions in relation to the protection, welfare and development and advancement of the Scheduled Tribes as the President may, subject to the provisions of any law made by Parliament, by rule specify.
(6) The President shall cause all such reports to be laid before each House of Parliament along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the Union and the reasons for the non-acceptance, if any, of any of such recommendations.
(7) Where any such report, or any part thereof, relates to any matter with which any State Government is concerned, a copy of such report shall be forwarded to the Governor of the State who shall cause it to be laid before the Legislature of the State along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the State and the reasons for the non-acceptance, if any, of any of such recommendations.
(8) The Commission shall, while investigating any matter referred to in sub-clause (a) or inquiring into any complaint referred to in sub-clause (b) of clause (5), have all the powers of a civil court trying a suit and in particular in respect of the following matters, namely:-
(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;
(b) requiring the discovery and production of any document;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for the examination of witnesses and documents;
(f) any other matter which the President may, by rule, determine.
(9) The Union and every State Government shall consult the Commission on all major policy matters affecting Scheduled Tribes.”.
1. Inserted by Constitution (Eighty-Ninth amendment) Act, 2003, sec. 3 (w.e.f. 19-2-2004).
Section 339. Control of the Union over the administration of Scheduled Areas and the welfare of Scheduled Tribes
(1) The President may at any time and shall, at the expiration of ten years from the commencement of this Constitution by order appoint a Commission to report on the administration of the Scheduled Areas and the welfare of the Scheduled Tribes in the States 1[***].
The order may define the composition, powers and procedure of the Commission and may contain such incidental or ancillary provisions, as the President may consider necessary or desirable.
(2) The executive power of the Union shall extend to the giving of directions to 2[a State] as to the drawing up and execution of schemes specified in the direction to be essential for the welfare of the Scheduled Tribes in the State.
1. The words and letters “specified in Part A and Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956., for “any such State”.
Section 340. Appointment of a Commission to investigate the conditions of backward classes
(1) The President may by order appoint a Commission consisting of such persons as he thinks fit to investigate the conditions of socially and educationally backward classes within the territory of India and the difficulties under which they labour and to make recommendations as to the steps that should be taken by the Union or any State to remove such difficulties and to improve their condition and as to the grants that should be made for the purpose by the Union or any State and the conditions subject to which such grants should be made, and the order appointing such Commission shall define the procedure to be followed by the Commission.
(2) A Commission so appointed shall investigate the matters referred to them and present to the President a report setting out the facts as found by them and making such recommendations as they think proper.
(3) The President shall cause a copy of the report so presented together with a memorandum explaining the action taken thereon to be laid before each House of Parliament.
Section 341. Scheduled Castes
(1) The President 1[may with respect to any State 2[or Union territory], and where it is a State 3[***], after consultation with the Governor 4[***] thereof,] by public notification5, specify the castes, races or tribes or parts of or groups within castes, races or tribes which shall for the purposes of this Constitution be deemed to be Scheduled Castes in relation to that State 2[or Union territory, as the case may be].
(2) Parliament may by law include in or exclude from the list of Scheduled Castes specified in a notification issued under clause (1) any caste, race or tribe or part of or group within any caste, race or tribe, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.
1. Subs. by the Constitution (First Amendment) Act, 1951, s. 10, for “may, after consultation with the Governor or Rajpramukh of a State”.
2. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
3. The words and letters “specified in Part A or Part B of the First Schedule” omitted by s. 29 and Sch., ibid.
4. The words “or Rajpramukh” omitted by s. 29 and Sch., ibid.
5. See the Constitution (Scheduled Castes) Order, 1950 (C.O. 19), the Constitution (cheduled Castes) (Union Territories) Order, 1951 (C.O. 32), the Constitution (Jammu and Kashmir) Scheduled Castes Order, 1956 (C.O.52), the Constitution (Dadra and Nagar Haveli) Scheduled Castes Order, 1962 (C.O. 64), the Constitution
(Pondicherry) Scheduled Castes Order, 1964 (C.O. 68), the Constitution (Goa, Daman and Diu) Scheduled Castes Order, 1968 (C.O. 81) and the Constitution (Sikkim) Scheduled Castes Order, 1978 (C.O. 110).
Section 342. Scheduled Tribes
(1) The President 1[may with respect to any State 2[or Union territory], and where it is a State 3[***], after consultation with the Governor 4[***] thereof,] by public notification 5, specify the tribes or tribal communities or part of or groups within tribes or tribal communities which shall for the purposes of this Constitution be deemed to be Scheduled Tribes in relation to that State 6[or Union territory, as the case may be].
(2) Parliament may by law include in or exclude from the list of Scheduled Tribes specified in a notification issued under clause (1) any tribe or tribal community or part of or group within any tribe or tribal community, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.
1. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by the Constitution (First Amendment) Act, 1951, s. 11, for “may, after consultation with the Governor or Rajpramukh of a State,”.
3. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
4. The words “or Rajpramukh” omitted by s. 29 and Sch., ibid.
5. See the Constitution (Scheduled Tribes) Order, 1950 (C.O.22), the Constitution (Scheduled Tribes) (Union Territories) Order, 1951 (C.O.33), the Constitution (Andaman and Nicobar Islands) Scheduled Tribes Order, 1959 (C.O.58), the Constitution (Dadra and Nagar Haveli) Scheduled Tribes Order, 1962 (C.O.65), the Constitution (Scheduled Tribes) (Uttar Pradesh) Order, 1967 (C.O.78), the Constitution (Goa, Daman and Diu) Scheduled Tribes Order, 1968 (C.O.82), the Constitution (Nagaland) Scheduled Tribes Order, 1970 (C.O.88) and the Constitution (Sikkim) Scheduled Tribes Order, 1978 (C.O.111).
6. Ins. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
Section 343. Official language of the Union
(1) The official language of the Union shall be Hindi in Devanagari script.
The form of numerals to be used for the official purposes of the Union shall be the international form of Indian numerals.
(2) Notwithstanding anything in clause (1), for a period of fifteen years from the commencement of this Constitution, the English language shall continue to be used for all the official purposes of the Union for which it was being used immediately before such commencement:
Provided that the President may, during the said period, by order 1 authorise the use of the Hindi language in addition to the English language and of the Devanagari form of numerals in addition to the international form of Indian numerals for any of the official purposes of the Union.
(3) Notwithstanding anything in this article, Parliament may by law provide for the use, after the said period of fifteen years, of—
(a) the English language, or
(b) the Devanagari form of numerals,
for such purposes as may be specified in the law.
1. See C.O. 41.
Section 344. Commission and Committee of Parliament on official language
(1) The President shall, at the expiration of five years from the commencement of this Constitution and thereafter at the expiration of ten years from such commencement, by order constitute a Commission which shall consist of a Chairman and such other members representing the different languages specified in the Eighth Schedule as the President may appoint, and the order shall define the procedure to be followed by the Commission.
(2) It shall be the duty of the Commission to make recommendations to the President as to-
(a) The progressive use of the Hindi language for the official purposes of the Union;
(b) Restrictions on the use of the English language for all or any of the official purposes of the Union;
(c) The language to be used for all or any of the purposes mentioned in article 348;
(d) The form of numerals to be used for any one or more specified purposes of the Union;
(e) Any other matter referred to the Commission by the President as regards the official language of the Union and the language for communication between the Union and a State or between one State and another and their use.
(3) In making their recommendations under clause (2), the Commission shall have due regard to the industrial, cultural and scientific advancement of India, and the just claims and the interests of persons belonging to the non-Hindi speaking areas in regard to the public services.
(4) There shall be constituted a Committee consisting of thirty members, of whom twenty shall be members of the House of the People and ten shall be members of the Council of States to be elected respectively by the members of the House of the People and the members of the Council of States in accordance with the system of proportional representation by means of the single transferable vote.
(5) It shall be the duty of the Committee to examine the recommendations of the Commission constituted under clause (1) and to report to the President their opinion thereon.
(6) Notwithstanding anything in article 343, the President may, after consideration of the report referred to in clause (5), issue directions in accordance with the whole or any part of that report.
Section 345. Official language or languages of a State
Subject to the provisions of articles 346 and 347, the Legislature of a State may by law adopt any one or more of the languages in use in the State or Hindi as the language or languages to be used for all or any of the official purposes of that State:
Provided that, until the Legislature of the State otherwise provides by law, the English language shall continue to be used for those official purposes within the State for which it was being used immediately before the commencement of this Constitution.
Section 346. Official language for communication between one State and another or between a State and the Union
The language for the time being authorised for use in the Union for official purposes shall be the official language for communication between one State and another State and between a State and the Union:
Provided that if two or more States agree that the Hindi language should be the official language for communication between such States, that language may be used for such communication.
Section 347. Special provision relating to language spoken by a section of the population of a State
On a demand being made in that behalf the President may, if he is satisfied that a substantial proportion of the population of a State desire the use of any language spoken by them to be recognised by that State, direct that such language shall also be officially recognised throughout that State or any part thereof for such purpose as he may specify.
Section 348. Language to be used in the Supreme Court and in the High Courts and for Acts, Bills, etc
(1) Notwithstanding anything in the foregoing provisions of this Part, until Parliament by law otherwise provides-
(a) All proceedings in the Supreme Court and in every High Court,
(b) The authoritative texts-
(i) Of all Bills to be introduced or amendments thereto to be moved in either House of Parliament or in the House or either House of the Legislature of a State,
(ii) Of all Acts passed by Parliament or the Legislature of a State and of all Ordinances promulgated by the President or the Governor 1[***] of a State, and
(iii) Of all orders, rules, regulations and bye-laws issued under this Constitution or under any law made by Parliament or the Legislature of a State,
Shall be in the English language.
(2) Notwithstanding anything in sub-clause (a) of clause (1), the Governor 1[***] of a State may, with the previous consent of the President, authorise the use of the Hindi language, or any other language used for any official purposes of the State, in proceedings in the High Court having its principal seat in that State:
Provided that nothing in this clause shall apply to any judgment, decree or order passed or made by such High Court.
(3) Notwithstanding anything in sub-clause (b) of clause (1), where the Legislature of a State has prescribed any language other than the English language for use in Bills introduced in, or Acts passed by, the Legislature of the State or in Ordinances promulgated by the Governor 1[***] of the State or in any order, rule, regulation or bye-law referred to in paragraph (iii) of that sub-clause, a translation of the same in the English language published under the authority of the Governor 1[***] of the State in the Official Gazette of that State shall be deemed to be the authoritative text thereof in the English language under this article.
1. The words “or Rajpramukh” omitted by s. 29 and Sch., by the Constitution (Seventh Amendment) Act, 1956.
Section 349. Special procedure for enactment of certain laws relating to language
During the period of fifteen years from the commencement of this Constitution, no Bill or amendment making provision for the language to be used for any of the purposes mentioned in clause (1) of article 348 shall be introduced or moved in either House of Parliament without the previous sanction of the President, and the President shall not give his sanction to the introduction of any such Bill or the moving of any such amendment except after he has taken into consideration the recommendations of the Commission constituted under clause (1) of article 344 and the report of the Committee constituted under clause (4) of that article.
Section 350. Language to be used in representations for redress of grievances
Every person shall be entitled to submit a representation for the redress of any grievance to any officer or authority of the Union or a State in any of the languages used in the Union or in the State, as the case may be.
Section 350A. Facilities for instruction in mother-tongue at primary stage
1[350A. Facilities for instruction in mother-tongue at primary stage.
It shall be the endeavour of every State and of every local authority within the State to provide adequate facilities for instruction in the mother-tongue at the primary stage of education to children belonging to linguistic minority groups; and the President may issue such directions to any State as he considers necessary or proper for securing the provision of such facilities.
1. Ins. by the Constitution (Seventh Amendment) Act, 1956, sec. 21.
Section 350B. Special Officer for linguistic minorities
(1) There shall be a Special Officer for linguistic minorities to be appointed by the President.
(2) It shall be the duty of the Special Officer to investigate all matters relating to the safeguards provided for linguistic minorities under this Constitution and report to the President upon those matters at such intervals as the President may direct, and the President shall cause all such reports to be laid before each House of Parliament, and sent to the Governments of the States concerned.]
Section 351. Directive for development of the Hindi language
It shall be the duty of the Union to promote the spread of the Hindi language, to develop it so that it may serve as a medium of expression for all the elements of the composite culture of India and to secure its enrichment by assimilating without interfering with its genius, the forms, style and expressions used in Hindustani and in the other languages of India specified in the Eighth Schedule, and by drawing, wherever necessary or desirable, for its vocabulary, primarily on Sanskrit and secondarily on other languages.
Section 352. Proclamation of Emergency
(1) If the President is satisfied that a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or 1[armed rebellion], he may, by Proclamation, make a declaration to that effect 2[in respect of the whole of India or of such part of the territory thereof as may be specified in the Proclamation].
3[Explanation. A Proclamation of Emergency declaring that the security of India or any part of the territory thereof is threatened by war or by external aggression or by armed rebellion may be made before the actual occurrence of war or of any such aggression or rebellion, if the President is satisfied that there is imminent danger thereof.]
4[(2) A Proclamation issued under clause (1) may be varied or revoked by a subsequent Proclamation.
(3) The President shall not issue a Proclamation under clause (1) or a Proclamation varying such Proclamation unless the decision of the Union Cabinet (that is to say, the Council consisting of the Prime Minister and other Ministers of Cabinet rank appointed under article 75) that such a Proclamation may be issued has been communicated to him in writing.
(4) Every Proclamation issued under this article shall be laid before each House of Parliament and shall, except where it is a Proclamation revoking a previous Proclamation, cease to operate at the expiration of one month unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation (not being a Proclamation revoking a previous Proclamation) is issued at a time when the House of the People has been dissolved, or the dissolution of the House of the People takes place during the period of one month referred to in this clause, and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution, unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
(5) A Proclamation so approved shall, unless revoked, cease to operate on the expiration of a period of six months from the date of the passing of the second of the resolutions approving the Proclamation under clause (4):
Provided that if and so often as a resolution approving the continuance in force of such a Proclamation is passed by both Houses of Parliament the Proclamation shall, unless revoked, continue in force for a further period of six months from the date on which it would otherwise have ceased to operate under this clause:
Provided further that if the dissolution of the House of the People takes place during any such period of six months and a resolution approving the continuance in force of such Proclamation has been passed by the Council of States but no resolution with respect to the continuance in force of such Proclamation has been passed by the House of the People during the said period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days, a resolution approving the continuance in force of the Proclamation has been also passed by the House of the People.
(6) For the purposes of clauses (4) and (5), a resolution may be passed by either House of Parliament only by a majority of the total membership of that House and by a majority of not less than two-thirds of the Members of that House present and voting.
(7) Notwithstanding anything contained in the foregoing clauses, the President shall revoke a Proclamation issued under clause (1) or a Proclamation varying such Proclamation if the House of the People passes a resolution disapproving, or, as the case may be, disapproving the continuance in force of, such Proclamation.
(8) Where a notice in writing signed by not less than one-tenth of the total number of members of the House of the People has been given, of their intention to move a resolution for disapproving, or, as the case may be, for disapproving the continuance in force of, a Proclamation issued under clause (1) or a Proclamation varying such Proclamation, -
(a) To the Speaker, if the House is in session; or
(b) To the President, if the House is not in session,
A special sitting of the House shall be held within fourteen days from the date on which such notice is received by the Speaker, or, as the case may be, by the President, for the purpose of considering such resolution.]
5[6(9)] The power conferred on the President by this article shall include the power to issue different Proclamations on different grounds, being war or external aggression or 1[armed rebellion] or imminent danger of war or external aggression or 7[armed rebellion], whether or not there is a Proclamation already issued by the President under clause (1) and such Proclamation is in operation.
8[* * * *]
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 37, for “internal disturbance”(w.e.f. 20-6-1979).
2. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 48 (w.e.f. 3-1-1977).
3. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 37 (w.e.f. 20-6-1979).
4. Subs. by s. 37, the Constitution (Forty-fourth Amendment) Act, 1978, for cls. (2), (2A) and (3) (w.e.f. 20-6-1979).
5. Ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 5 (retrospectively).
6. Cl. (4) renumbered as cl.(9) by the Constitution (Forty-fourth Amendment) Act, 1978, s. 37 (w.e.f. 20-6-1979).
7. Cl. (5) omitted by s. 37, the Constitution (Forty-fourth Amendment) Act, 1978 (w.e.f. 20-6-1979).
8. Clause (5) omitted by the Constitution (Fourty-fourth Amendment) Act, 1978, sec. 37 (w.e.f. 20-6-1979).
Section 353. Effect of Proclamation of Emergency
While a Proclamation of Emergency is in operation, then-
(a) Notwithstanding anything in this Constitution, the executive power of the Union shall extend to the giving of directions to any State as to the manner in which the executive power thereof is to be exercised;
(b) The power of Parliament to make laws with respect to any matter shall include power to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and authorities of the Union as respects that matter, notwithstanding that it is one which is not enumerated in the Union List:
1[Provided that where a Proclamation of Emergency is in operation only in any part of the territory of India, -
(i) The executive power of the Union to give directions under clause (a), and
(ii) The power of Parliament to make laws under clause (b),
Shall also extend to any State other than a State in which or in any part of which the Proclamation of Emergency is in operation if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 49 (w.e.f. 3-1-1977).
Section 354. Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation
(1) The President may, while a Proclamation of Emergency is in operation, by order direct that all or any of the provisions of articles 268 to 279 shall for such period, not extending in any case beyond the expiration of the financial year in which such Proclamation ceases to operate, as may be specified in the order, have effect subject to such exceptions or modifications as he thinks fit.
(2) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
Section 355. Duty of the Union to protect States against external aggression and internal disturbance
It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the government of every State is carried on in accordance with the provisions of this Constitution.
Section 356. Provisions in case of failure of constitutional machinery in States
(1) If the President, on receipt of a report from the Governor 1[***] of a State or otherwise, is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the President may by Proclamation-
(a) Assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by the Governor 1[***] or any body or authority in the State other than the Legislature of the State;
(b) Declare that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament;
(c) Make such incidental and consequential provisions as appear to the President to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provisions of this Constitution relating to any body or authority in the State:
Provided that nothing in this clause shall authorise the President to assume to himself any of the powers vested in or exercisable by a High Court, or to suspend in whole or in part the operation of any provision of this Constitution relating to High Courts.
(2) Any such Proclamation may be revoked or varied by a subsequent Proclamation.
(3) Every Proclamation under this article shall be laid before each House of Parliament and shall, except where it is a Proclamation revoking a previous Proclamation, cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation (not being a Proclamation revoking a previous Proclamation) is issued at a time when the House of the People is dissolved or the dissolution of the House of the People takes place during the period of two months referred to in this clause, and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
(4) A Proclamation so approved shall, unless revoked, cease to operate on the expiration of a period of 3[six months from the date of issue of the Proclamation]:
Provided that if and so often as a resolution approving the continuance in force of such a Proclamation is passed by both Houses of Parliament, the Proclamation shall, unless revoked, continue in force for a further period of 4[six months] from the date on which under this clause it would otherwise have ceased to operate, but no such Proclamation shall in any case remain in force for more than three years:
Provided further that if the dissolution of the House of the People takes place during any such period of 4[six months] and a resolution approving the continuance in force of such Proclamation has been passed by the Council of States, but no resolution with respect to the continuance in force of such Proclamation has been passed by the House of the People during the said period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the continuance in force of the Proclamation has been also passed by the House of the People:
5[Provided also that in the case of the Proclamation issued under clause (1) on the 11th day of May, 1987 with respect to the State of Punjab, the reference in the first proviso to this clause to “three years” shall be construed as a reference to 6[five years].]
7[(5) Notwithstanding anything contained in clause (4), a resolution with respect to the continuance in force of a Proclamation approved under clause (3) for any period beyond the expiration of one year from the date of issue of such Proclamation shall not be passed by either House of Parliament unless-
(a) A Proclamation of Emergency is in operation, in the whole of India or, as the case may be, in the whole or any part of the State, at the time of the passing of such resolution, and
(b) The Election Commission certifies that the continuance in force of the Proclamation approved under clause (3) during the period specified in such resolution is necessary on account of difficulties in holding general elections to the Legislative Assembly of the State concerned:]
8[Provided that nothing in this clause shall apply to the Proclamation issued under clause (1) on the 11th day of May, 1987 with respect to the State of Punjab.]
1. The words “or Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
2. The words “or Rajpramukh, as the case may be” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
3. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 38, for “one year from the date of the passing of the second of the resolutions approving the Proclamation under clause (3)” (w.e.f. 20-6-1979). The words “one year” were subs. for the original words “six months” by the Constitution (Forty-second Amendment) Act, 1976, s. 50 (w.e.f. 3-1-1977).
4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 38, for “one year” (w.e.f. 20-6-1979). The words “one year” were subs. for the original words “six months” by the Constitution (Forty-second Amendment) Act, 1976, s. 50 (w.e.f. 3-1-1977).
5. Ins. by the Constitution (Sixty-fourth Amendment) Act, 1990, s. 2.
6. Successively subs. by the Constitution (Sixty-seventh Amendment) Act, 1990, s. 2 and the Constitution (Sixty-eighth Amendment) Act, 1991, s. 2 to read as above.
7. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 38, for cl.(5) (w.e.f. 20-6-1979). Cl. (5) was ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 6 (retrospectively).
8. Subs by the Constitution (Fifty-ninth Amendment) Act, 1988, sec. 2 and omited by the Constitution (Sixty-third Amendment) Act, 1989, sec. 2 (w.e.f. 6-1-1990) and again Ins. by the Constitution (Sixty-fourth Amendment) Act, 1990, sec. 2 (w.e.f. 16-4-1990).
Section 357. Exercise of legislative powers under Proclamation issued under article 356
(1) Where by a Proclamation issued under clause (1) of article 356, it has been declared that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament, it shall be competent-
(a) For Parliament to confer on the President the power of the Legislature of the State to make laws, and to authorise the President to delegate, subject to such conditions as he may think fit to impose, the power so conferred to any other authority to be specified by him in that behalf;
(b) For Parliament, or for the President or other authority in whom such power to make laws is vested under sub-clause (a), to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and authorities thereof;
(c) For the President to authorise when the House of the People is not in session expenditure from the Consolidated Fund of the State pending the sanction of such expenditure by Parliament.
1[(2) Any law made in exercise of the power of the Legislature of the State by Parliament or the President or other authority referred to in sub-clause (a) of clause (1) which Parliament or the President or such other authority would not, but for the issue of a Proclamation under article 356, have been competent to make shall, after the Proclamation has ceased to operate, continue in force until altered or repealed or amended by a competent Legislature or other authority.]
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 51, for cl. (2) (w.e.f. 3-1-1977).
Section 358. Suspension of provisions of article 19 during emergencies
1[(1)] 2[While a Proclamation of Emergency declaring that the security of India or any part of the territory thereof is threatened by war or by external aggression is in operation], nothing in article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect:
3[Provided that 4[where such Proclamation of Emergency] is in operation only in any part of the territory of India, any such law may be made, or any such executive action may be taken, under this article in relation to or in any State or Union territory in which or in any part of which the Proclamation of Emergency is not in operation, if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
5[(2) Nothing in clause (1) shall apply-
(a) To any law which does not contain a recital to the effect that such law is in relation to the Proclamation of Emergency in operation when it is made; or
(b) To any executive action taken otherwise than under a law containing such a recital.]
1. Art. 358 renumbered as cl. (1) thereof by the Constitution (Forty-fourth Amendment) Act, 1978, s. 39 (w.e.f. 20-6-1979).
2. Subs. by s. 39, the Constitution (Forty-fourth Amendment) Act, 1978, for “While a Proclamation of Emergency is in operation” (w.e.f. 20-6-1979).
3. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 52 (w.e.f. 3-1-1977).
4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 39, for “where a Proclamation of Emergency” (w.e.f. 20-6-1979).
5. Ins. by s. 39, the Constitution (Forty-fourth Amendment) Act, 1978, (w.e.f. 20-6-1979).
Section 359. Suspension of the enforcement of the rights conferred by Part III during emergencies
(1) Where a Proclamation of Emergency is in operation, the President may by order delcare that the right to move any court for the enforcement of such of 1[the rights conferred by Part III (except articles 20 and 21)] as may be mentioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order.
2[(1A) While an order made under clause (1) mentioning any of 1[of the rights conferred by Part III (except articles 20 and 21)] is in operation, nothing in that Part conferring those rights shall restrict the power of the State as defined in the said Part to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the order aforesaid ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect:]
3[Provided that where a Proclamation of Emergency is in operation only in any part of the territory of India, any such law may be made, or any such executive action may be taken, under this article in relation to or in any State or Union territory in which or in any part of which the Proclamation of Emergency is not in operation, if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
4[(1B) Nothing in clause (1A) shall apply-
(a) To any law which does not contain a recital to the effect that such law is in relation to the Proclamation of Emergency in operation when it is made; or
(b) To any executive action taken otherwise than under a law containing such a recital.]
(2) An order made as aforesaid may extend to the whole or any part of the territory of India:
3[Provided that where a Proclamation of Emergency is in operation only in a part of the territory of India, any such order shall not extend to any other part of the territory of India unless the President, being satisfied that the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation, considers such extension to be necessary.]
(3) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 40, for “the rights conferred by Part III” (w.e.f. 20-6-1979).
2. Ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 7, (retrospectively).
3. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 53 (w.e.f. 3-1-1977).
4. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 40 (w.e.f. 20-6-1979).
Section 359A. Application of this Part to the State of Punjab
1[359A. Application of this Part to the State of Punjab.
Rep. by the Constitution (Sixty-third Amendment) Act, 1989, s. 3 (w.e.f. 6-1-1990).]
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 40 (w.e.f. 20-6-1979).
Section 360. Provisions as to financial emergency
(1) If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect.
1[(2) A Proclamation issued under clause (1)-
(a) May be revoked or varied by a subsequent Proclamation;
(b) Shall be laid before each House of Parliament;
(c) Shall cease to operate at the expiration of two months, unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub-clause (c), and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.]
(3) During the period any such Proclamation as is mentioned in clause (1) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose.
(4) Notwithstanding anything in this Constitution-
(a) Any such direction may include-
(i) A provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State;
(ii) A provision requiring all Money Bills or other Bills to which the provisions of article 207 apply to be reserved for the consideration of the President after they are passed by the Legislature of the State;
(b) It shall be competent for the President during the period any Proclamation issued under this article is in operation to issue directions for the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts.
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1. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 41, for cl.(2) (w.e.f. 20-6-1979).
2. Cl. (5) was ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 8 (retrospectively) and omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 41 (w.e.f. 20-6-1979).
Section 361. Protection of President and Governors and Rajpramukhs
(1) The President, or the Governor or Rajpramukh of a State, shall not be answerable to any court for the exercise and performance of the powers and duties of his office or for any act done or purporting to be done by him in the exercise and performance of those powers and duties:
Provided that the conduct of the President may be brought under review by any court, tribunal or body appointed or designated by either House of Parliament for the investigation of a charge under article 61:
Provided further that nothing in this clause shall be construed as restricting the right of any person to bring appropriate proceedings against the Government of India or the Government of a State.
(2) No criminal proceedings whatsoever shall be instituted or continued against the President, or the Governor 1[***] of a State, in any court during his term of office.
(3) No process for the arrest or imprisonment of the President, or the Governor 1[***] of a State, shall issue from any court during his term of office.
(4) No civil proceedings in which relief is claimed against the President, or the Governor 1[***] of a State, shall be instituted during his term of office in any court in respect of any act done or purporting to be done by him in his personal capacity, whether before or after he entered upon his office as President, or as Governor 1[***] of such State, until the expiration of two months next after notice in writing has been delivered to the President or the Governor 2[***], as the case may be, or left at his office stating the nature of the proceedings, the cause of action therefor, the name, description and place of residence of the party by whom such proceedings are to be instituted and the relief which he claims.
1. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. The words “or the Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956
Section 361A. Protection of publication of proceedings of Parliament and State Legislatures
1[361A. Protection of publication of proceedings of Parliament and State Legislatures.
(1) No person shall be liable to any proceedings, civil or criminal, in any court in respect of the publication in a newspaper of a substantially true report of any proceedings of either House of Parliament or the Legislative Assembly, or, as the case may be, either House of the Legislature, of a State, unless the publication is proved to have been made with malice:
Provided that nothing in this clause shall apply to the publication of any report of the proceedings of a secret sitting of either House of Parliament or the Legislative Assembly, or, as the case may be, either House of the Legislature, of a State.
(2) Clause (1) shall apply in relation to reports or matters broadcast by means of wireless telegraphy as part of any programme or service provided by means of a broadcasting station as it applies in relation to reports or matters published in a newspaper.
Explanation. In this article, “newspaper” includes a news agency report containing material for publication in a newspaper.]
1. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 42 (w.e.f. 20-6-1979).
Section 361B. Disqualification for the appointment on remunerative political post
1[361B. Disqualification for the appointment on remunerative political post.
A member of a House belonging to an political party who is qualified for being a member of House under paragraph 2 of the Tenth Schedule shall also be disqualified to hold any remunerative political post for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or till the date on which he contests an election to a House and is declared elected, whichever is earlier.
Explanation:
For the purpose of this article:-
(a) The expression “House” has the meaning assigned to it in clause (a) of paragraph 1 of the Tenth Schedule;
(b) The expression “remunerative political post” means any office:-
(i) Under the Government of India or the Government of a State where the salary or remuneoration for such office is paid out of the public revenue of the Government of India or the Government of the State, as the case may be;or
(ii) Under the body, whether incorporated or not, which is wholly or partially owned by the Government of India or the Government of a State and the salary or remuneration by the such office is paid by such body,
except where such salary or remuneration paid is compensatory in nature.]
1. Ins. by the Constitution (Ninty-first Amendment) Act, 2003, s. 4 (w.e.f. 1-1-2004).
Section 362. Rights and privileges of Rulers of Indian States
Rep. by the Constitution (Twenty-sixth Amendment) Act, 1971, s. 2.
Section 363. Bar to interference by courts in disputes arising out of certain treaties, agreements, etc.
(1) Notwithstanding anything in this Constitution but subject to the provisions of article 143, neither the Supreme Court nor any other court shall have jurisdiction in any dispute arising out of any provision of a treaty, agreement, covenant, engagement, sanad or other similar instrument which was entered into or executed before the commencement of this Constitution by any Ruler of an Indian State and to which the Government of the Dominion of India or any of its predecessor Governments was a party and which has or has been continued in operation after such commencement, or in any dispute in respect of any right accruing under or any liability or obligation arising out of any of the provisions of this Constitution relating to any such treaty, agreement, covenant, engagement, sanad or other similar instrument.
(2) In this article-
(a) “Indian State” means any territory recognised before the commencement of this Constitution by His Majesty or the Government of the Dominion of India as being such a State; and
(b) “Ruler” includes the Prince, Chief or other person recognised before such commencement by His Majesty or the Government of the Dominion of India as the Ruler of any Indian State.
Section 363A. Recognition granted to Rulers of Indian States to cease and privy purses to be abolished
1[363A. Recognition granted to Rulers of Indian States to cease and privy purses to be abolished.
Notwithstanding anything in this Constitution or in any law for the time being in force-
(a) The Prince, Chief or other person who, at any time before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was recognised by the President as the Ruler of an Indian State or any person who, at any time before such commencement, was recognised by the President as the successor of such ruler shall, on and from such commencement, cease to be recognised as such Ruler or the successor of such Ruler;
(b) On and from the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, privy purse is abolished and all rights, liabilities and obligations in respect of privy purse are extinguished and accordingly the Ruler or, as the case may be, the successor of such Ruler, referred to in clause (a) or any other person shall not be paid any sum as privy purse.]
1. Ins. by the Constitution (Twenty-sixth Amendment) Act, 1971, s. 3. (w.e.f. 28-12-1971).
Section 364. Special provisions as to major ports and aerodromes
(1) Notwithstanding anything in this Constitution, the President may by public notification direct that as from such date as may be specified in the notification-
(a) Any law made by Parliament or by the Legislature of a State shall not apply to any major port or aerodrome or shall apply thereto subject to such exceptions or modifications as may be specified in the notification, or
(b) Any existing law shall cease to have effect in any major port or aerodrome except as respects things done or omitted to be done before the said date, or shall in its application to such port or aerodrome have effect subject to such exceptions or modifications as may be specified in the notification.
(2) In this article-
(a) “Major port” means a port declared to be a major port by or under any law made by Parliament or any existing law and includes all areas for the time being included within the limits of such port;
(b) “Aerodrome” means aerodrome as defined for the purposes of the enactments relating to airways, aircraft and air navigation.
Section 365. Effect of failure to comply with, or to give effect to, directions given by the Union
Where any State has failed to comply with, or to give effect to, any directions given in the exercise of the executive power of the Union under any of the provisions of this Constitution, it shall be lawful for the President to hold that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution.
Section 366. Definitions
In this Constitution, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say-
(1) “Agricultural income” means agricultural income as defined for the purposes of the enactments relating to Indian income-tax;
(2) “An Anglo-Indian” means a person whose father or any of whose other male progenitors in the male line is or was of European descent but who is domiciled within the territory of India and is or was born within such territory of parents habitually resident therein and not established there for temporary purposes only;
(3) “Article” means an article of this Constitution;
(4) “Borrow” includes the raising of money by the grant of annuities, and “loan” shall be construed accordingly;
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(5) “Clause” means a clause of the article in which the expression occurs;
(6) “Corporation tax” means any tax on income, so far as that tax is payable by companies and is a tax in the case of which the following conditions are fulfilled: -
(a) That it is not chargeable in respect of agricultural income;
(b) That no deduction in respect of the tax paid the by companies is, by any enactments which may apply to the tax, authorised to be made from dividends payable by the companies to individuals;
(c) That no provision exists for taking the tax so paid into account in computing for the purposes of Indian income-tax the total income of individuals receiving such dividends, or in computing the Indian income-tax payable by, or refundable to, such individuals;
(7) “Corresponding Province”, “corresponding Indian State” or “corresponding State” means in cases of doubt such Province, Indian State or State as may be determined by the President to be the corresponding Province, the corresponding Indian State or the corresponding State, as the case may be, for the particular purpose in question;
(8) “Debt” includes any liability in respect of any obligation to repay capital sums by way of annuities and any liability under any guarantee, and “debt charges” shall be construed accordingly;
(9) “Estate duty” means a duty to be assessed on or by reference to the principal value, ascertained in accordance with such rules as may be prescribed by or under laws made by Parliament or the legislature of a State relating to the duty, of all property passing upon death or deemed, under the provisions of the said laws, so to pass;
(10) “Existing law” means any law, Ordinance, order, bye-law, rule or regulation passed or made before the commencement of this Constitution by any Legislature, authority or person having power to make such a law, Ordinance, order, bye-law, rule or regulation;
(11) “Federal Court” means the Federal Court constituted under the Government of India Act, 1935;
(12) “Goods” includes all materials, commodities, and articles;
(13) “Guarantee” includes any obligation undertaken before the commencement of this Constitution to make payments in the event of the profits of an undertaking falling short of a specified amount;
(14) “High Court” means any Court, which is deemed for the purposes of this Constitution to be a High Court for any State and includes-
(a) Any Court in the territory of India constituted or reconstituted under this Constitution as a High Court, and
(b) Any other Court in the territory of India which may be declared by Parliament by law to be a High Court for all or any of the purposes of this Constitution;
(15) “Indian State” means any territory, which the Government of the Dominion of India recognised as such a State;
(16) “Part” means a Part of this Constitution;
(17) “Pension” means a pension, whether contributory or not, of any kind whatsoever payable to or in respect of any person, and includes retired pay so payable; a gratuity so payable and any sum or sums so payable by way of the return, with or without interest thereon or any other addition thereto, of subscriptions to a provident fund;
(18) “Proclamation of Emergency” means a Proclamation issued under clause (1) of article 352;
(19) “Public notification” means a notification in the Gazette of India, or, as the case may be, the Official Gazette of a State;
(20) “Railway” does not include-
(a) A tramway wholly within a municipal area, or
(b) Any other line of communication wholly situates in one State and declared by Parliament by law not to be a railway;
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3[(22) “Ruler” means the Prince, Chief of other person who, at any time before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was recognised by the President as the Ruler of an Indian State or any person who, at any time before such commencement, was recognised by the President as the successor of such Ruler;]
(23) “Schedule” means a Schedule to this Constitution;
(24) “Scheduled Castes” means such castes, races or tribes or parts of or groups within such castes, races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of this Constitution;
(25) “Scheduled Tribes” means such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are deemed under article 342 to be Scheduled Tribes for the purposes of this Constitution;
(26) “Securities” includes stock;
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(27) “Sub-clause” means a sub-clause of the clause in which the expression occurs;
(28) “Taxation” includes the imposition of any tax or impost, whether general or local or special, and “tax” shall be construed accordingly;
(29) “Tax on income” includes a tax in the nature of an excess profits tax;
5[(29A) “Tax on the sale or purchase of goods” includes-
(a) A tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;
(b) A tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(c) A tax on the delivery of goods on hire-purchase or any system of payment by instalments;
(d) A tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(e) A tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(f) A tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration,
And such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;]
6[(30) “Union territory” means any Union territory specified in the First Schedule and includes any other territory comprised within the territory of India but not specified in that Schedule.]
1. Cl. (4A) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 54 (w.e.f. 1-2-1977) and omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 11 (w.e.f. 13-4-1978).
2. Cl. (21) omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
3. Subs. by the Constitution (Twenty-sixth Amendment) Act, 1971, s. 4, for cl. (22).
4. Cl. (26A) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 54 (w.e.f. 1-2-1977) and omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 11 (w.e.f. 13-4-1978).
5. Ins. by the Constitution (Forty-sixth Amendment) Act, 1982, s. 4.
6. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for cl. (30).
Section 367. Interpretation.
(1) Unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India.
(2) Any reference in this Constitution to Acts or laws of, or made by, Parliament, or to Acts or laws of, or made by, the Legislature of a State 1[***], shall be construed as including a reference to an Ordinance made by the President or, to an Ordinance made by a Governor 2[***], as the case may be.
(3) For the purposes of this Constitution “foreign State” means any State other than India:
Provided that, subject to the provisions of any law made by Parliament, the President may by 3order declare any State not to be a foreign State for such purposes as may be specified in the order.
1. The words and letters “specified in Part A or Part B of the First Schedule” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
2. The words “or Rajpramukh” omitted by s. 29 and Sch., the Constitution (Seventh Amendment) Act, 1956.
3. See the Constitution (Declaration as to Foreign States) Order, 1950 (C.O. 2).
Section 368. Power of Parliament to amend the Constitution and procedure therefor
368 1[Power of Parliament to amend the Constitution and procedure therefor.]
2[(1) Notwithstanding anything in this Constitution, Parliament may in exercise of its constituent power amend by way of addition, variation or repeal any provision of this Constitution in accordance with the procedure laid down in this article.]
3[(2)] An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting, 4[it, shall be presented to the President who shall give his assent to the Bill and thereupon] the Constitution shall stand amended in accordance with the terms of the Bill:
Provided that if such amendment seeks to make any change in-
(a) Article 54, article 55, article 73, article 162 or article 241, or
(b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part XI, or
(c) Any of the Lists in the Seventh Schedule, or
(d) The representation of States in Parliament, or
(e) The provisions of this article, the amendment shall also require to be ratified by the Legislatures of not less than one-half of the States 5[***] by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.
6[(3) Nothing in article 13 shall apply to any amendment made under this article.]
7[(4) No amendment of this Constitution (including the provisions of Part III) made or purporting to have been made under this article [whether before or after the commencement of section 55 of the Constitution (Forty-second Amendment) Act, 1976] shall be called in question in any court on any ground.
(5) For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this article.]
1. Subs. by the Constitution (Twenty-fourth Amendment) Act, 1971, s. 3, for “Procedure for amendment of the Constitution.”.
2. Ins. by s. 3. the Constitution (Twenty-fourth Amendment) Act, 1971.
3. Art. 368 renumbered as cl.(2) by s. 3, the Constitution (Twenty-fourth Amendment) Act, 1971.
4. Subs. by s. 3, ibid., for “it shall be presented to the President for his assent and upon such assent being given to the Bill”.
5. The words and letters “specified in Parts A and B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
6. Ins. by the Constitution (Twenty-fourth Amendment) Act, 1971, s. 3.
7. Cls. (4) and (5) were ins. in article 368 by s. 55 of the Constitution (Forty-second Amendment) Act, 1976. This section has been declared invalid by the Supreme Court in Minerva Mills Ltd. and Others Vs. Union of India and Others (1980) 2 S.C.C. 591.
Section 369. Temporary power to Parliament to make laws with respect to certain matters in the State List as if they were matters in the Concurrent List
1[Temporary, Transitional and Special Provisions.]
Notwithstanding anything in this Constitution, Parliament shall, during a period of five years from the commencement of this Constitution, have power to make laws with respect to the following matters as if they were enumerated in the Concurrent List, namely: -
(a) Trade and commerce within a State in, and the production, supply and distribution of, cotton and woollen textiles, raw cotton (including ginned cotton and unginned cotton or kapas), cotton seed, paper (including newsprint), food-stuffs (including edible oilseeds and oil), cattle fodder (including oil-cakes and other concentrates), coal (including coke and derivatives of coal), iron, steel and mica;
(b) Offences against laws with respect to any of the matters mentioned in clause (a), jurisdiction and powers of all courts except the Supreme Court with respect to any of those matters, and fees in respect of any of those matters but not including fees taken in any court;
But any law made by Parliament, which Parliament would not but for the provisions of this article have been competent to make, shall, to the extent of the incompetency, cease to have effect on the expiration of the said period, except as respects things done or omitted to be done before the expiration thereof.
1. Subs. by the Constitution (Thirteenth Amendment) Act, 1962, s. 2. for “TEMPORARY, TRANSITIONAL AND SPECIAL PROVISIONS” (w.e.f. 1-12-1963).
Section 370. Temporary provisions with respect to the State of Jammu and Kashmir
1[370. Temporary provisions with respect to the State of Jammu and Kashmir.
(1) Notwithstanding anything in this Constitution, -
(a) The provisions of article 238 shall not apply in relation to the State of Jammu and Kashmir;
(b) The power of Parliament to make laws for the said State shall be limited to-
(i) Those matters in the Union List and the Concurrent List which, in consultation with the Government of the State, are declared by the President to correspond to matters specified in the Instrument of Accession governing the accession of the State to the Dominion of India as the matters with respect to which the Dominion Legislature may make laws for that State; and
(ii) Such other matters in the said Lists as, with the concurrence of the Government of the State, the President may by order specify.
Explanation. For the purposes of this article, the Government of the State means the person for the time being recognised by the President as the Maharaja of Jammu and Kashmir acting on the advice of the Council of Ministers for the time being in office under the Maharaja’s Proclamation dated the fifth day of March, 1948;
(c) The provisions of article 1 and of this article shall apply in relation to that State;
(d) Such of the other provisions of this Constitution shall apply in relation to that State subject to such exceptions and modifications as the President may by order 1specify:
Provided that no such order, which relates to the matters specified in the Instrument of Accession of the State referred to in paragraph (i) of sub-clause (b) shall be issued except in consultation with the Government of the State:
Provided further that no such order, which relates to matters other than those referred to in the last preceding proviso shall be issued except with the concurrence of that Government.
(2) If the concurrence of the Government of the State referred to in paragraph (ii) of sub-clause (b) of clause (1) or in the second proviso to sub-clause (d) of that clause be given before the Constituent Assembly for the purpose of framing the Constitution of the State is convened, it shall be placed before such Assembly for such decision as it may take thereon.
(3) Notwithstanding anything in the foregoing provisions of this article, the President may, by public notification, declare that this article shall cease to be operative or shall be operative only with such exceptions and modifications and from such date as he may specify:
Provided that the recommendation of the Constituent Assembly of the State referred to in clause (2) shall be necessary before the President issues such a notification.]
1. In exercise of the powers conferred by this article the President, on the recommendation of the Constituent Assembly of the State of Jammu and Kashmir, declared that, as from the 17th day of November, 1952, the said article 370 shall be operative with the modification that for the Explanation in clause (1) thereof, the following Explanation is substituted namely:-
Explanation-
For the purposes of this article, the Government of the State means the person for the time being recognised by the President on the recommendation of the Legislative Assembly of the State as the “Sadar-i-Rayasat of Jammu and Kashmir, acting on the advice of the Council of Ministers of the State for the time being in office.”
Section 371. Special provision with respect to the States of Maharashtra and Gujarat.
1[371. Special provision with respect to the States of 2[***] Maharashtra and Gujarat.
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(2) Notwithstanding anything in this Constitution, the President may by order made with respect to 4the State of Maharashtra or Gujarat], provide for any special responsibility of the Governor for-
(a) The establishment of separate development boards for Vidarbha, Marathwada, 5[and the rest of Maharashtra or, as the case may be,] Saurashtra, Kutch and the rest of Gujarat with the provision that a report on the working of each of these boards will be placed each year before the State Legislative Assembly;
(b) The equitable allocation of funds for developmental expenditure over the said areas, subject to the requirements of the State as a whole; and
(c) An equitable arrangement providing adequate facilities for technical education and vocational training, and adequate opportunities for employment in services under the control of the State Government, in respect of all the said areas, subject to the requirements of the State as a whole.]
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 22. for art. 371.
2. The words “Andhra Pradesh,” omitted by the Constitution (Thirty-second Amendment) Act, 1973, s. 2 (w.e.f. 1-7-1974).
3. Cl. (1) omitted by s. 2, the Constitution (Thirty-second Amendment) Act, 1973 (w.e.f. 1-7-1974).
4. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 85, for “the State of Bombay” (w.e.f. 1-5-1960).
5. Subs. by s. 85, the Bombay Reorganisation Act, 1960 (11 of 1960), for “the rest of Maharashtra,” (w.e.f. 1-5-1960).
Section 371A. Special provision with respect to the State of Nagaland
1[371A. Special provision with respect to the State of Nagaland.
(1) Notwithstanding anything in this Constitution, -
(a) No Act of Parliament in respect of-
(i) Religious or social practices of the Nagas,
(ii) Naga customary law and procedure,
(iii) Administration of civil and criminal justice involving decisions according to Naga customary law,
(iv) Ownership and transfer of land and its resources,
Shall apply to the State of Nagaland unless the Legislative Assembly of Nagaland by a resolution so decides;
(b) The Governor of Nagaland shall have special responsibility with respect to law and order in the State of Nagaland for so long as in his opinion internal disturbances occurring in the Naga Hills-Tuensang Area immediately before the formation of that State continue therein or in any part thereof and in the discharge of his functions in relation thereto the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken:
Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this sub-clause required to act in the exercise of his individual judgment, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgment:
Provided further that if the President on receipt of a report from the Governor or otherwise is satisfied that it is no longer necessary for the Governor to have special responsibility with respect to law and order in the State of Nagaland, he may by order direct that the Governor shall cease to have such responsibility with effect from such date as may be specified in the order;
(c) In making his recommendation with respect to any demand for a grant, the Governor of Nagaland shall ensure that any money provided by the Government of India out of the Consolidated Fund of India for any specific service or purpose is included in the demand for a grant relating to that service or purpose and not in any other demand;
(d) As from such date as the Governor of Nagaland may by public notification in this behalf specify, there shall be established a regional council for the Tuensang district consisting of thirty-five members and the Governor shall in his discretion make rules providing for-
(i) The composition of the regional council and the manner in which the members of the regional council shall be chosen:
Provided that the Deputy Commissioner of the Tuensang district shall be the Chairman ex officio of the regional council and the Vice-Chairman of the regional council shall be elected by the members thereof from amongst themselves;
(ii) The qualifications for being chosen as, and for being, members of the regional council;
(iii) The term of office of, and the salaries and allowances, if any, to be paid to members of, the regional council;
(iv) The procedure and conduct of business of the regional council;
(v) The appointment of officers and staff of the regional council and their conditions of services; and
(vi) Any other matter in respect of which it is necessary to make rules for the constitution and proper functioning of the regional council.
(2) Notwithstanding anything in this Constitution, for a period of ten years from the date of the formation of the State of Nagaland or for such further period as the Governor may, on the recommendation of the regional council, by public notification specify in this behalf, -
(a) The administration of the Tuensang district shall be carried on by the Governor;
(b) Where any money is provided by the Government of India to the Government of Nagaland to meet the requirements of the State of Nagaland as a whole, the Governor shall in his discretion arrange for an equitable allocation of that money between the Tuensang district and the rest of the State;
(c) No Act of the Legislature of Nagaland shall apply to Tuensang district unless the Governor, on the recommendation of the regional council, by public notification so directs and the Governor in giving such direction with respect to any such Act may direct that the Act shall in its application to the Tuensang district or any part thereof have effect subject to such exceptions or modifications as the Governor may specify on the recommendation of the regional council:
Provided that any direction given under this sub-clause may be given so as to have retrospective effect;
(d) The Governor may make regulations for the peace, progress and good government of the Tuensang district and any regulations so made may repeal or amend with retrospective effect, if necessary, any Act of Parliament or any other law which is for the time being applicable to that district;
(e) (i) One of the members representing the Tuensang district in the Legislative Assembly of Nagaland shall be appointed Minister for Tuensang affairs by the Governor on the advice of the Chief Minister and the Chief Minister in tendering his advice shall act on the recommendation of the majority of the members as aforesaid2;
(ii) The Minister for Tuensang affairs shall deal with, and have direct access to the Governor on, all matters relating to the Tuensang district but he shall keep the Chief Minister informed about the same;
(f) Notwithstanding anything in the foregoing provisions of this clause, the final decision on all matters relating to the Tuensang district shall be made by the Governor in his discretion;
(g) In articles 54 and 55 and clause (4) of article 80, references to the elected members of the Legislative Assembly of a State or to each such member shall include references to the members or member of the Legislative Assembly of Nagaland elected by the regional council established under this article;
(h) In article 170-
(i) Clause (1) shall, in relation to the Legislative Assembly of Nagaland, have effect as if for the word “sixty”, the word “forty-six” had been substituted;
(ii) In the said clause, the reference to direct election from territorial constituencies in the State shall include election by the members of the regional council established under this article;
(iii) In clauses (2) and (3), references to territorial constituencies shall mean references to territorial constituencies in the Kohima and Mokokchung districts.
(3) If any difficulty arises in giving effect to any of the foregoing provisions of this article, the President may by order do anything (including any adaptation or modification of any other article) which appears to him to be necessary for the purpose of removing that difficulty:
Provided that no such order shall be made after the expiration of three years from the date of the formation of the State of Nagaland.
Explanation. In this article, the Kohima, Mokokchung and Tuensang districts shall have the same meanings as in the State of Nagaland Act, 1962.]
1. Ins. by the Constitution (Thirteenth Amendment) Act, 1962, s. 2 (w.e.f. 1-12-1963).
2. Paragraph 2 of the Constitution (Removal of Difficulties) order No. X provides (w.e.f. 1-12-1963) that article 371A of the Constitution of India shall have effect as if the following proviso were added to paragraph (i) of sub.clause (e) of clause (2) thereof, namely: – “Provided that the Governor may, on the advice of the Chief Minister, appoint any person as Minister for Tuensang affairs to act as such until such time as persons are chosen in accordance with law to fill the seats allocated to the Tuensang district in the Legislative Assembly of Nagaland.”.
Section 371B. Special provision with respect to the State of Assam.
1[371B. Special provision with respect to the State of Assam.
Notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Assam, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the tribal areas specified in 2[Part I] of the table appended to paragraph 20 of the Sixth Schedule and such number of other members of that Assembly as may be specified in the order and for the modifications to be made in the rules of procedure of that Assembly for the constitution and proper functioning of such committee.]
1. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 4 (w.e.f. 25-9-1979).
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for “Part A” (w.e.f. 21-1-1972).
Section 371C. Special provision with respect to the State of Manipur
1[371C. Special provision with respect to the State of Manipur.
(1) Notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Manipur, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the Hill Areas of that State, for the modifications to be made in the rules of business of the Government and in the rules of procedure of the Legislative Assembly of the State and for any special responsibility of the Governor in order to secure the proper functioning of such committee.
(2) The Governor shall annually, or whenever so required by the President, make a report to the President regarding the administration of the Hill Areas in the State of Manipur and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.
Explanation. In this article, the expression “Hill Areas” means such areas as the President may, by order, declare to be Hill areas.]
1. Ins. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 5 (w.e.f. 15-2-1972).
Section 371D. Special provisions with respect to the State of Andhra Pradesh
1[371D. Special provisions with respect to the State of Andhra Pradesh.
(1) The President may by order made with respect to the State of Andhra Pradesh provide, having regard to the requirements of the State as a whole, for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of education, and different provisions may be made for various parts of the State.
(2) An order made under clause (1) may, in particular, -
(a) Require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised;
(b) Specify any part or parts of the State, which shall be regarded as the local area-
(i) For direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government;
(ii) For direct recruitment to posts in any cadre under any local authority within the State; and
(iii) For the purposes of admission to any University within the State or to any other educational institution which is subject to the control of the State Government;
(c) Specify the extent to which, the manner in which and the conditions subject to which, preference or reservation shall be given or made-
(i) In the matter of direct recruitment to posts in any such cadre referred to in sub-clause (b) as may be specified in this behalf in the order;
(ii) In the matter of admission to any such University or other educational institution referred to in sub-clause (b) as may be specified in this behalf in the order,
To or in favour of candidates who have resided or studied for any period specified in the order in the local area in respect of such cadre, University or other educational institution, as the case may be.
(3) The President may, by order, provide for the constitution of an Administrative Tribunal for the State of Andhra Pradesh to exercise such jurisdiction, powers and authority [including any jurisdiction, power and authority which immediately before the commencement of the Constitution (Thirty-second Amendment) Act, 1973, was exercisable by any court (other than the Supreme Court) or by any tribunal or other authority] as may be specified in the order with respect to the following matters, namely:-
(a) Appointment, allotment or promotion to such class or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order;
(b) Seniority of persons appointed, allotted or promoted to such class or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order;
(c) Such other conditions of service of persons appointed, allotted or promoted to such class or classes of posts in any civil service of the State or to such class or classes of civil posts under the State or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order.
(4) An order made under clause (3) may-
(a) Authorise the Administrative Tribunal to receive representations for the redress of grievances relating to any matter within its jurisdiction as the President may specify in the order and to make such orders thereon as the Administrative Tribunal deems fit;
(b) Contain such provisions with respect to the powers and authorities and procedure of the Administrative Tribunal (including provisions with respect to the powers of the Administrative Tribunal to punish for contempt of itself) as the President may deem necessary;
(c) Provide for the transfer to the Administrative Tribunal of such classes of proceedings, being proceedings relating to matters within its jurisdiction and pending before any court (other than the Supreme Court) or tribunal or other authority immediately before the commencement of such order, as may be specified in the order;
(d) Contain such supplemental, incidental and consequential provisions (including provisions as to fees and as to limitation, evidence or for the application of any law for the time being in force subject to any exceptions or modifications) as the President may deem necessary.
(5) The order of the Administrative Tribunal finally disposing of any case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier:
Provided that the State Government may, by special order made in writing and for reasons to be specified therein, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be.
(6) Every special order made by the State Government under the proviso to clause (5) shall be laid, as soon as may be after it is made, before both Houses of the State Legislature.
(7) The High Court for the State shall not have any powers of superintendence over the Administrative Tribunal and no court (other than the Supreme Court) or tribunal shall exercise any jurisdiction, power or authority in respect of any matter subject to the jurisdiction, power or authority of, or in relation to, the Administrative Tribunal.
(8) If the President is satisfied that the continued existence of the Administrative Tribunal is not necessary, the President may by order abolish the Administrative Tribunal and make such provisions in such order as he may deem fit for the transfer and disposal of cases pending before the Tribunal immediately before such abolition.
(9) Notwithstanding any judgment, decree or order of any court, tribunal or other authority, -
(a) No appointment, posting, promotion or transfer of any person-
(i) Made before the 1st day of November, 1956, to any post under the Government of, or any local authority within, the State of Hyderabad as it existed before that date; or
(ii) Made before the commencement of the Constitution (Thirty-second Amendment) Act, 1973, to any post under the Government of, or any local or other authority within, the State of Andhra Pradesh; and
(b) No action taken or thing done by or before any person referred to in sub-clause (a),
Shall be deemed to be illegal or void or ever to have become illegal or void merely on the ground that the appointment, posting, promotion or transfer of such person was not made in accordance with any law, then in force, providing for any requirement as to residence within the State of Hyderabad or, as the case may be, within any part of the State of Andhra Pradesh, in respect of such appointment, posting, promotion or transfer.
(10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.]
1. Ins. by the Constitution (Thirty-second Amendment) Act, 1973, s. 3 (w.e.f. 1-7-1974).
Section 371E. Establishment of Central University in Andhra Pradesh
1[371E. Establishment of Central University in Andhra Pradesh.
Parliament may by law provide for the establishment of a University in the State of Andhra Pradesh.]
1. Ins. by the Constitution (Thirty-second Amendment) Act, 1973, s. 3 (w.e.f. 1-7-1974).
Section 371F. Special provisions with respect to the State of Sikkim
1[371F. Special provisions with respect to the State of Sikkim.
Notwithstanding anything in this Constitution, -
(a) The Legislative Assembly of the State of Sikkim shall consist of not less than thirty members;
(b) As from the date of commencement of the Constitution (Thirty-sixth Amendment) Act, 1975 (hereafter in this article referred to as the appointed day)-
(i) The Assembly for Sikkim formed as a result of the elections held in Sikkim in April, 1974 with thirty-two members elected in the said elections (hereinafter referred to as the sitting members) shall be deemed to be the Legislative Assembly of the State of Sikkim duly constituted under this Constitution;
(ii) The sitting members shall be deemed to be the members of the Legislative Assembly of the State of Sikkim duly elected under this Constitution; and
(iii) The said Legislative Assembly of the State of Sikkim shall exercise the powers and perform the functions of the Legislative Assembly of a State under this Constitution;
(c) In the case of the Assembly deemed to be the Legislative Assembly of the State of Sikkim under clause (b) , the references to the period of 2[five years], in clause (1) of article shall be construed as references to a period of 3[four years] and the said period of 3[four years] shall be deemed to commence from the appointed day;
(d) Until other provisions are made by Parliament by law, there shall be allotted to the State of Sikkim one seat in the House of the People and the State of Sikkim shall form one parliamentary constituency to be called the parliamentary constituency for Sikkim;
(e) The representative of the State of Sikkim in the House of the People in existence on the appointed day shall be elected by the members of the Legislative Assembly of the State of Sikkim;
(f) Parliament may, for the purpose of protecting the rights and interests of the different sections of the population of Sikkim make provision for the number of seats in the Legislative Assembly of the State of Sikkim which may be filled by candidates belonging to such sections and for the delimitation of the assembly constituencies from which candidates belonging to such sections alone may stand for election to the Legislative Assembly of the State of Sikkim;
(g) The Governor of Sikkim shall have special responsibility for peace and for an equitable arrangement for ensuring the social and economic advancement of different sections of the population of Sikkim and in the discharge of his special responsibility under this clause, the Governor of Sikkim shall, subject to such directions as the President may, from time to time, deem fit to issue, act in his discretion;
(h) All property and assets (whether within or outside the territories comprised in the State of Sikkim) which immediately before the appointed day were vested in the Government of Sikkim or in any other authority or in any person for the purposes of the Government of Sikkim shall, as from the appointed day, vest in the Government of the State of Sikkim;
(i) The High Court functioning as such immediately before the appointed day in the territories comprised in the State of Sikkim shall, on and from the appointed day, be deemed to be the High Court for the State of Sikkim;
(j) All courts of civil, criminal and revenue jurisdiction, all authorities and all officers, judicial, executive and ministerial, throughout the territory of the State of Sikkim shall continue on and from the appointed day to exercise their respective functions subject to the provisions of this Constitution;
(k) All laws in force immediately before the appointed day in the territories comprised in the State of Sikkim or any part thereof shall continue to be in force therein until amended or repealed by a competent Legislature or other competent authority;
(l) For the purpose of facilitating the application of any such law as is referred to in clause (k) in relation to the administration of the State of Sikkim and for the purpose of bringing the provisions of any such law into accord with the provisions of this Constitution, the President may, within two years from the appointed day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon, every such law shall have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law;
(m) Neither the Supreme Court nor any other court shall have jurisdiction in respect of any dispute or other matter arising out of any treaty, agreement, engagement or other similar instrument relating to Sikkim which was entered into or executed before the appointed day and to which the Government of India or any of its predecessor Governments was a party, but nothing in this clause shall be construed to derogate from the provisions of article 143;
(n) The President may, by public notification, extend with such restrictions or modifications as he thinks fit to the State of Sikkim any enactment, which is in force in a State in India at the date of the notification;
(o) If any difficulty arises in giving effect to any of the foregoing provisions of this article, the President may, by 4order, do anything (including any adaptation or modification of any other article) which appears to him to be necessary for the purpose of removing that difficulty:
Provided that no such order shall be made after the expiry of two years from the appointed day;
(p) All things done and all actions taken in or in relation to the State of Sikkim or the territories comprised therein during the period commencing on the appointed day and ending immediately before the date on which the Constitution (Thirty-sixth Amendment) Act, 1975, receives the assent of the President shall, in so far as they are in conformity with the provisions of this Constitution as amended by the Constitution (Thirty-sixth Amendment) Act, 1975, be deemed for all purposes to have been validly done or taken under this Constitution as so amended.]
1. Subs. by the Constitution (Fourty-fourth Amendment) Act, 1978, s. 43, for “six years” (w.e.f. 6-9-1979). The words “six years” were subs. for the original words “five years” by the Constitution (Forty-second Amendment) Act, 1976, s. 56 (w.e.f. 3-1-1977).
2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s.43, for “five years” (w.e.f. 6-9-1979). The words “five years” were subs. for the original words “four years” by the Constitution (Forty-second Amendment) Act, 1976, s. 56 (w.e.f. 3-1-1977).
3. Ins. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 3 (w.e.f. 26-4-1975).
4. See the Constitution (Removal of Difficulties) Order XI (C.O. 99).
Section 371G. Special provision with respect to the State of Mizoram
1[371G. Special provision with respect to the State of Mizoram.
Notwithstanding anything in this Constitution, -
(a) No Act of Parliament in respect of-
(i) Religious or social practices of the Mizos,
(ii) Mizo customary law and procedure,
(iii) Administration of civil and criminal justice involving decisions according to Mizo customary law,
(iv) Ownership and transfer of land,
Shall apply to the State of Mizoram unless the Legislative Assembly of the State of Mizoram by a resolution so decides:
Provided that nothing in this clause shall apply to any Central Act in force in the Union territory of Mizoram immediately before the commencement of the Constitution (Fifty-third Amendment) Act, 1986;
(b) The Legislative Assembly of the State of Mizoram shall consist of not less than forty members.]
1. Ins. by the Constitution (Fifty-third Amendment) Act, 1986, s. 2 (w.e.f. 20-2-1987).
Section 371H. Special provision with respect to the State of Arunachal Pradesh
1[371H. Special provision with respect to the State of Arunachal Pradesh.
Notwithstanding anything in this Constitution, -
(a) The Governor of Arunachal Pradesh shall have special responsibility with respect to law and order in the State of Arunachal Pradesh and in the discharge of his functions in relation thereto, the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken:
Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this clause required to act in the exercise of his individual judgment, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgment:
Provided further that if the President on receipt of a report from the Governor or otherwise is satisfied that it is no longer necessary for the Governor to have special responsibility with respect to law and order in the State of Arunachal Pradesh, he may by order direct that the Governor shall cease to have such responsibility with effect from such date as may be specified in the order;
(b) The Legislative Assembly of the State of Arunachal Pradesh shall consist of not less than thirty members.]
1. Ins. by the Constitution (Fifty-fifth Amendment) Act, 1986, s. 2 (w.e.f. 20-2-1987).
Section 371-I. Special provision with respect to the State of Goa
1[371-I. Special provision with respect to the State of Goa.
Notwithstanding anything in this Constitution, the Legislative Assembly of the State of Goa shall consist of not less than thirty members.]
1. Ins. by the Constitution (Fifty-sixth Amendment) Act, 1987, s. 2 (w.e.f. 30-5-1987).
Section 372. Continuance in force of existing laws and their adaptation
(1) Notwithstanding the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.
(2) For the purpose of brining the provisions of any law in force in the territory of India into accord with the provisions of this Constitution, the President may by order1 make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law.
(3) Nothing in clause (2) shall be deemed-
(a) To empower the President to make any adaptation or modification of any law after the expiration of 2[three years] from the commencement of this Constitution; or
(b) To prevent any competent Legislature or other competent authority from repealing or amending any law adapted or modified by the President under the said clause.
Explanation I. The expression “law in force” in this article shall include a law passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas.
Explanation II. Any law passed or made by a Legislature or other competent authority in the territory of India which immediately before the commencement of this Constitution had extra-territorial effect as well as effect in the territory of India shall, subject to any such adaptations and modifications as aforesaid, continue to have such extra-territorial effect.
Explanation III. Nothing in this article shall be construed as continuing any temporary law in force beyond the date fixed for its expiration or the date on which it would have expired if this Constitution had not come into force.
Explanation IV. An Ordinance promulgated by the Governor of a Province under section 88 of the Government of India Act, 1935, and in force immediately before the commencement of this Constitution shall, unless withdrawn by the Governor of the corresponding State earlier, cease to operate at the expiration of six weeks from the first meeting after such commencement of the Legislative Assembly of that State functioning under clause (1) of article 382, and nothing in this article shall be construed as continuing any such Ordinance in force beyond the said period.
1. See the Adaptation of Laws Order, 1950, dated the 26th January, 1950, Gazette of India, Extraordinary, p.449, as amended by Notification No. S.R.O. 115, dated the 5th June, 1950, Gazette of India, Extraordinary, Part II, Section 3, p.51, Notification No. S.R.O. 870, dated the 4th November, 1950, Gazette of India, Extraordinary, Part II, Section 3, p.903, Notification No. S.R.O. 508, dated the 4th April, 1951, Gazette of India, Extraordinary, Part II, Section 3, p.287, Notification No. S.R.O. 1140B, dated the 2nd July, 1952, Gazette of India, Extraordinary, Part II, Section 3, p.616/I; and the Adaptation of the Travancore-Cochin Land Acquisition Laws Order, 1952, dated the 20th November, 1952, Gazette of India, Extraordinary, Part II, section 3, p.923.
2. Subs. by the Constitution (First Amendment) Act, 1951, s. 12, for “two years”.
Section 372A. Power of the President to adapt laws
1[372A. Power of the President to adapt laws.
(1) For the purposes of bringing the provisions of any law in force in India or in any part thereof, immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, into accord with the provisions of this Constitution as amended by that Act, the President may by order made before the first day of November, 1957, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law.
(2) Nothing in clause (1) shall be deemed to prevent a competent Legislature or other competent authority from repealing or amending any law adapted or modified by the President under the said clause.]
1. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 23.
Section 373. Power of President to make order in respect of persons under preventive detention in certain cases
Until provision is made by Parliament under clause (7) of article 22, or until the expiration of one year from the commencement of this Constitution, whichever is earlier, the said article shall have effect as if for any reference to Parliament in clauses (4) and (7) thereof there were substituted a reference to the President and for any reference to any law made by Parliament in those clauses there were substituted a reference to an order made by the President.
Section 374. Provisions as to Judges of the Federal Court and proceedings pending in the Federal Court or before His Majesty in Council
(1) The Judges of the Federal Court holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the Supreme Court and shall thereupon be entitled to such salaries and allowances and to such rights in respect of leave of absence and pension as are provided for under article 125 in respect of the Judges of the Supreme Court.
(2) All suits, appeals and proceedings, civil or criminal, pending in the Federal Court at the commencement of this Constitution shall stand removed to the Supreme Court, and the Supreme Court shall have jurisdiction to hear and determine the same, and the judgments and orders of the Federal Court delivered or made before the commencement of this Constitution shall have the same force and effect as if they had been delivered or made by the Supreme Court.
(3) Nothing in this Constitution shall operate to invalidate the exercise of jurisdiction by His Majesty in Council to dispose of appeals and petitions from, or in respect of, any judgment, decree or order of any court within the territory of India in so far as the exercise of such jurisdiction is authorised by law, and any order of His Majesty in Council made on any such appeal or petition after the commencement of this Constitution shall for all purposes have effect as if it were an order or decree made by the Supreme Court in the exercise of the jurisdiction conferred on such Court by this Constitution.
(4) On and from the commencement of this Constitution the jurisdiction of the authority functioning as the Privy Council in a State specified in Part B of the First Schedule to entertain and dispose of appeals and petitions from or in respect of any judgment, decree or order of any court within that State shall cease, and all appeals and other proceedings pending before the said authority at such commencement shall be transferred to, and disposed of by, the Supreme Court.
(5) Further provision may be made by Parliament by law to give effect to the provisons of this article.
Section 375. Courts, authorities and officers to continue to function subject to the provisions of the Constitution
All courts of civil, criminal and revenue jurisdiction, all authorities and all officers, judicial, executive and ministerial, throughout the territory of India, shall continue to exercise their respective functions subject to the provisions of this Constitution.
Section 376. Provisions as to Judges of High Courts
(1) Notwithstanding anything in clause (2) of article 217, the Judges of a High Court in any Province holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the High Court in the corresponding State, and shall thereupon be entitled to such salaries and allowances and to such rights in respect of leave of absence and pension as are provided for under article 221 in respect of the Judges of such High Court. 1[Any such Judge shall, notwithstanding that he is not a citizen of India, be eligible for appointment as Chief Justice of such High Court, or as Chief Justice or other Judge of any other High Court.]
(2) The Judges of a High Court in any Indian State corresponding to any State specified in Part B of the First Schedule holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the High Court in the State so specified and shall, notwithstanding anything in clauses (1) and (2) of article 217 but subject to the proviso to clause (1) of that article, continue to hold office until the expiration of such period as the President may by order determine.
(3) In this article, the expression “Judge” does not include an acting Judge or an additional Judge.
1. Added by the Constitution (First Amendment) Act, 1951, s. 13.
Section 377. Provisions as to Comptroller and Auditor-General of India
The Auditor-General of India holding office immediately before the commencement of this Constitution shall, unless he has elected otherwise, become on such commencement the Comptroller and Auditor-General of India and shall thereupon be entitled to such salaries and to such rights in respect of leave of absence and pension as are provided for under clause (3) of article 148 in respect of the Comptroller and Auditor-General of India and be entitled to continue to hold office until the expiration of his term of office as determined under the provisions which were applicable to him immediately before such commencement.
Section 378. Provisions as to Public Service Commissions
(1) The members of the Public Service Commission for the Dominion of India holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the members of the Public Service Commission for the Union and shall, notwithstanding anything in clauses (1) and (2) of article 316 but subject to the proviso to clause (2) of that article, continue to hold office until the expiration of their term of office as determined under the rules which were applicable immediately before such commencement to such members.
(2) The Members of a Public Service Commission of a Province or of a Public Service Commission serving the needs of a group of Provinces holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the members of the Public Service Commission for the corresponding State or the members of the Joint State Public Service Commission serving the needs of the corresponding States, as the case may be, and shall, notwithstanding anything in clauses (1) and (2) of article 316 but subject to the proviso to clause (2) of that article, continue to hold office until the expiration of their term of office as determined under the rules which were applicable immediately before such commencement to such members.
Section 378A. Special provision as to duration of Andhra Pradesh Legislative Assembly
1[378A. Special provision as to duration of Andhra Pradesh Legislative Assembly.
Notwithstanding anything contained in article 172, the Legislative Assembly of the State of Andhra Pradesh as constituted under the provisions of sections 28 and 29 of the States Reorganisation Act, 1956, shall, unless sooner dissolved, continue for a period of five years from the date referred to in the said section 29 and no logner and the expiration of the said period shall operate as a dissolution of that Legislative Assembly.]
1. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 24.
Section 379-391. Repealed
Rep. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
Section 392. Power of the President to remove difficulties
(1) The President may, for the purpose of removing any difficulties, particularly in relation to the transition from the provisions of the Government of India Act, 1935, to the provisions of this Constitution, by order direct that this Constitution shall, during such period as may be specified in the order, have effect subject to such adaptations, whether by way of modification, addition or omission, as he may deem to be necessary or expedient:
Provided that no such order shall be made after the first meeting of Parliament duly constituted under Chapter II of Part V.
(2) Every order made under clause (1) shall be laid before Parliament.
(3) The powers conferred on the President by this article, by article 324, by clause (3) of article 367 and by article 391 shall, before the commencement of this Constitution, be exercisable by the Governor-General of the Dominion of India.
Section 393. Short title
This Constitution may be called the Constitution of India.
Section 394. Commencement
This article and articles 5, 6, 7, 8, 9, 60, 324, 366, 367, 379, 380, 388, 391, 392 and 393 shall come into force at once, and the remaining provisons of this Constitution shall come into force on the twenty-sixth day of January, 1950, which day is referred to in this Constitution as the commencement of this Constitution.
Section 394A. Authoritative text in the Hindi language
1[394A. Authoritative text in the Hindi language.
(1) The President shall cause to be published under his authority, -
(a) The translation of this Constitution in the Hindi langauge, signed by the members of the Constituent Assembly, with such modifications as may be necessary to bring it in conformity with the language, style and terminology adopted in the authoritative texts of Central Acts in the Hindi language, and incorporating therein all the amendments of this Constitution made before such publication; and
(b) The translation in the Hindi language of every amendment of this Constitution made in the English language.
(2) The translation of this Constitution and of every amendment thereof published under clause (1) shall be construed to have the same meaning as the original thereof and if any difficulty arises in so construing any part of such translation, the President shall cause the same to be revised suitably.
(3) The translation of this Constitution and of every amendment thereof published under this article shall be deemed to be, for all purposes, the authoritative text thereof in the Hindi language.]
1. Ins. by the Constitution (Fifty-eighth Amendment) Act, 1987, s. 3 (w.e.f. 9-12-1987).
Section 395. Repeals
The Indian Independence Act, 1947, and the Government of India Act, 1935, together with all enactments amending or supplementing the latter Act, but not including the Abolition of Privy Council Jurisdiction Act, 1949, are hereby repealed.
Section 396. FIRST SCHEDULE
1[FIRST SCHEDULE
[Articles 1 and 4]
- The States
| Name |
Territories |
| 1.Andhra Pradesh |
2[The territories specified in sub-section (1) of section 3 of the Andhra State Act, 1953, sub-section (1) of section 3 of the States Reorganisation Act, 1956, the First Schedule to the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959, and the Schedule to the Andhra Pradesh and Mysore (Transfer of Territory) Act, 1968, but excluding the territories specified in the Second Schedule to the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959.] |
| 2. Assam |
The territories which immediately before the commencement of this Constitution were comprised in the Province of Assam, the Khasi States and the Assam Tribal Areas, but excluding the territories specified in the Schedule to the Assam (Alteration of Boundaries) Act, 1951 3[and the territories specified in sub-section (1) of section 3 of the State of Nagaland Act, 1962] 4[and the territories specified in sections 5, 6 and 7 of the North-Eastern Areas (Reorganisation) Act, 1971]. |
| 3. Bihar |
5[The territories which immediately before the commencement of this Constitution were either comprised in the Province of Bihar or were being administered as if they formed part of that Province and the territories specified in clause (a) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968 but excluding the territories specified in sub-section (1) of section 3 of the Bihar and West Bengal (Tansfer of Territories) Act, 1956, and the territories specified in clause (b) of sub-section (1) of section 3 of the first mentioned Act.] 28and the territories specified in section 3 of The Bihar Reorganisation Act, 2000. |
| 6[4.Gujarat |
The territories referred to in sub-section (1) of section 3 of the Bombay Reorganisation Act, 1960.] |
| 5. Kerala |
The territories specified in sub-section (1) of section 5 of the States Reorganisation Act, 1956. |
| 6. Madhya Pradesh |
The territories specified in sub-section (1) of section 9 of the States Reorganisation Act, 1956 7[and the First Schedule to the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959.] 26but excluding the territories specified in section 3 of the Madhya Pradesh Reorganization Act, 2000. |
| 7[7.Tamil Nadu |
The territories which immediately before the commencement of this Constitution were either comprised in the Province of Madras or were being administered as if they formed part of that Province and the territories specified in section 4 of the States Reorganisation Act, 1956, 8[and the Second Schedule to the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959], but excluding the territories specified in sub-section (1) of section 3 and sub-section (1) of section 4 of the Andhra State Act, 1953 and 9[the territories specified in clause (b) of sub-section (1) of section 5, section 6 and clause (d) of sub-section (1) of section 7 of the States Reorganisation Act, 1956 and the territories specified in the First Schedule to the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959]. |
| 10[8. Maharashtra |
The territories specified in sub-section (1) of section 8 of the States Reorganisation Act, 1956, but excluding the territories referred to in sub-section (1) of section 3 of the Bombay Reorganisation Act, 1960.] |
| 11[9. Karnataka] |
The territories specified in sub-section (1) of section 7 of the States Reogranisation Act, 1956 12[but excluding the territory specified in the Schedule to the Andhra Pradesh and Mysore (Transfer of Territory) Act, 1968]. |
| 13[10.] Orissa |
The territories which immediately before the commencement of this Constitution were either comprised in the Province of Orissa or were being administered as if they formed part of that Province. |
| 13[11.] Punjab |
The territories specified in section 11 of the States Reorganisation Act, 1956 14[and the territories referred to in Part II of the First Schedule to the Acquired Territories (Merger) Act, 1960] 15[but excluding the territories refered to in Part II of the First Schedule to the Constitution (Ninth Amendment) Act, 1960] 16[and the territories specified in sub-section (1) of section 3, section 4 and sub-section (1) of section 5 of the Punjab Reorganisation Act, 1966]. |
| 13[12.] Rajasthan |
The territories specified in section 10 of the States Reorganisation Act, 1956 12[but excluding the territories specified in the First Schedule to the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959]. |
| 13[13.] Uttar Pradesh |
17[The territories which immediately before the commencement of this Constitution were either comprised in the Province known as the United Provinces or were being administered as if they formed part of that Province, the territories specified in clause (b) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968, and the territories specified in clause (b) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979, but excluding the territories sepcified in clause (a) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968, (24 of 1968) 27and the territories specified in section 3 of the Uttar Pradesh Reorganisation Act, 2000 and the territories specified in clause (a) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979.] |
| 13[14.] West Bengal |
The territories which immediately before the commencement of this Constitution were either comprised in the Province of West Bengal or were being administered as if they formed part of that Province and the territory of Chandernagore as defined in clause (c) of section 2 of the Chandernagore (Merger) Act, 1954 and also the territories specified in sub-section (1) of section 3 of the Bihar and West Bengal (Transfer of Territories) Act, 1956. |
| 13[15.] Jammu and Kashmir |
The territory, which immediately before the commencemnt of this Constitution was comprised in the Indian State of Jammu and Kashmir. |
| 18[16. Nagaland |
The territories specified in sub-section (1) of section 3 of the State of Nagaland Act, 1962.] |
| 12[17. Haryana |
19[The territories specified in sub-section (1) of section 3 of the Punjab Reorganisation Act, 1966 and the territories specified in clause (a) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979, but excluding the territories specified in clause (v) of sub-section (1) of section 4 of that Act.] |
| 20[18. Himachal |
The territories which immediately before the Pradesh commencement of this Constitution were being administered as if they were Chief Commissioners’ Provinces under the names of Himachal Pradesh and Bilaspur and the territories specified in sub-section (1) of section 5 of the Punjab Reorganisation Act, 1966.] |
| 21[19. Manipur |
The territory which immediately before the commencement of this Constitution was being administered as if it were a Chief Commissioner’s Province under the name of Manipur. |
| 20. Tripura |
The territory which immediately before the commencement of this Constitution was being administered as if it were a Chief Commissioner’s Province under the name of Tripura. |
| 21. Meghalaya |
The territories specified in section 5 of the North-Eastern Areas (Reorganisation) Act, 1971. |
| 22[22. Sikkim |
The territories, which immediately before the commencement of the Constitution (Thirty-sixth Amendment) Act, 1975, were comprised in Sikkim.] |
| 23[23. Mizoram |
The territories specified in section 6 of the North-Eastern Areas (Reorganisation) Act, 1971.] |
| 24[24. Arunachal Pradesh |
The territories specified in section 7 of the North-Eastern Areas (Reorganisation) Act, 1971.] |
| 25[25. Goa |
The territories specified in section 3 of the Goa, Daman and Diu Reorganisation Act, 1987.] |
| 2626. Chhattisgarh: |
The Territoties specified in section 3 of the Madhaya Pradesh Reorganisation Act, 2000. |
| 2727 Uttaranchal: |
The territories specified in section 3 of the Uttar Pradesh Reorganisation Act, 2000. |
| 2828. Jharkhand: |
The territories specified in section 3 of the Bihar Reorganisation Act, 2000. |
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 2, for the First Sch.
2. Subs. by the Andhra Pradesh and Mysore (Transfer of Territory) 1968 (36 of 1968), s. 4, for the former entry (w.e.f. 1-10-1968),
3. Added by the State of Nagaland Act, 1962 (27 of 1962), s. 4 (w.e.f. 1-12-1963).
4. Added by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972).
5. Subs. by the Bihar and Uttar Pradesh (Alteration of Boundries) Act, 1968 (24 of 1968), s. 4, for the former entry (w.e.f. 10-6-1970).
6. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 4, for entry 4 (w.e.f. 1-5-1960).
7. Ins. by the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959 (47 of 1959), s. 4 (w.e.f. 1-10-1959).
8. Ins. by the Andhra Pradesh and Madras (Alteration of Boundries) Act, 1959 (56 of 1959), s. 6 (w.e.f. 1-4-1960).
9. Subs. by s. 6, ibid., for certain words (w.e.f. 1-4-1960).
10. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960).
11. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 5, for “9. Mysore” (w.e.f. 1-11-1973).
12. Ins. by the Andhra Pradesh and Mysore (Transfer of Territory) Act, 1968 (36 of 1968), s. 4 (w.e.f. 1-10-1968).
13. Entries 8 to 14 renumbered as entries 9 to 15 by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960).
14. Ins. by the Acquired Territories (Merger) Act, 1960 (64 of 1960), s. 4 (w.e.f. 17-1-1961).
15. Added by the Constitution (Ninth Amendment) Act, 1960, s. 3 (w.e.f. 17-1-1961).
16. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 7 (w.e.f. 1-11-1966).
17. Subs. by the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979 (31 of 1979), s. 5, for the entry against “13. Uttar Pradesh” (w.e.f. 15-9-1983).
18. Ins. by the State of Nagaland Act, 1962 (27 of 1962), s. 4 (w.e.f. 1-12-1963).
19. Subs. by the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979 (31 of 1979), s. 5, for the entry against “17. Haryana” (w.e.f. 15-9-1983).
20. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970) s. 4, (w.e.f. 25-1-1971).
21. Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972).
22. Ins. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 2 (w.e.f. 26-4-1975).
23. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 4 (w.e.f. 20-2-1987).
24. Ins. by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 4. (w.e.f. 20-2-1987).
25. Ins. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 5 (w.e.f. 30-5-1987).
26. Madhya Pradesh Re-Organisation Act, 2000 (28 of 2000) W.E.F. 1-11-2000.
27. Uttar Pradesh Re-Organisation Act, 2000 (29 of 2000) W.E.F. 9-11-2000.
28. Bihar Re-Organisation Act, 2000 (30 of 2000) W.E.F. 15-11-2000.
II. The Union Territories
| Name |
Extent |
| 1. Delhi.. |
The territory, which immediately before the commencement of this Constitution was comprised in the Chief Commissioners Province of Delhi. |
| 1* * * * * |
|
| 2* * * * * |
|
| 3[2.] The Andaman and Nicobar Islands. |
The territory which immediately before the commencement of this Constitution was comprised in the Chief Commissioner’s Province of the Andaman and Nicobar Islands. |
| 3[3.] 4[Lakshadweep]. |
The territory specified in section 6 of the States Reorganisation Act, 1956. |
| 5[3[4.] Dadra and Nagar Haveli- |
The territory which immediately before the eleventh Nagar Haveli day of August, 1961 was comprised in Free Dadra and Nagar Haveli.] |
| 6[3[5.] 7Daman and Diu . |
The territories specified in section 4 of the Goa, Daman and Diu Reorganisation Act, 1987.] |
| 8[3[6.] 9Pondicherry. |
The territories which immediately before the sixteenth day of August, 1962, were comprised in the French Establishments in India known as Pondicherry, Karikal, Mahe and Yanam.] |
| 10[3[7.] Chandigarh.. |
The territories specified in section 4 of the Punjab Reorganisation Act, 1966.] |
| 11* * * * * |
|
| 12* * * * * |
|
1. Entry 2 relating to “Himachal Pradesh” omitted by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 4 (w.e.f. 25-1-1971).
2. Entries relating to Manipur and Tripura omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972).
3. Entries 4 to 9 renumbered as entries 2 to 7 by s. 9, ibid. (w.e.f. 21-1-1972).
4. Subs. by the Laccadive, Minicoy and Amindivi Islands (Alteration of Name) Act, 1973 (34 of 1973), s. 5, for “The Laccadive, Minicoy and Amindivi Islands” (w.e.f. 1-11-1973).
5. Ins. by the Constitution (Tenth Amendment) Act, 1961, s. 2.
6. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 5, for entry 5 (w.e.f. 30-5-1987).
7. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, ss. 3 and 7 (w.e.f. 16-8-1962).
8. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 7 (w.e.f. 1-11-1966).
9. Entry 8 relating to Mizoram omitted by the State of Mizoram Act, 1986 (34 of 1986), s. 4 and entry 9 relating to Arunachal Pradesh renumbered as entry 8 (w.e.f. 20-2-1987).
10. Entry 8 relating to Arunachal Pradesh omitted by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 4 (w.e.f. 20-2-1987).
11. Entry 8 relating to Mizoram omitted and entry 9 relating to Arunachal Pradesh renumberedas entry 8 by the State of Mizoram Act, 1986 (34 of 1986), sec. 4 (w.e.f. 20-2-1987).
12. Entry 8 relating to Arunachal Pradesh as renumbered by Act 34 of 1986, sec. 4 omitted by the State of Arunachal Pradesh Act, 1986 (69 of 1986), sec. 4 (w.e.f. 20-2-1987).
Section 397 SECOND SCHEDULE
SECOND SCHEDULE
[Articles 59(3), 65(3), 75(6), 97, 125, 148(3), 158(3), 164(5), 186 and 221]
PART A
Provisions as to the President and the Governors of States 1[***].
1. There shall be paid to the President and to the Governors of the States 1[***] the following emoluments per mensem, that is to say: -
The President …… 10,000 rupees2
The Governor of a State …… 5,500 rupees 3.
2. There shall also be paid to the President and to the Governors of the States 4[***] such allowances as were payable respectively to the Governor-General of the Dominion of India and to the Governors of the corresponding Provinces immediately before the commencement of this Constitution.
3. The President and the Governors of 5[the States] throughout their respective terms of office shall be entitled to the same privileges to which the Governor-General and the Governors of the corresponding Provinces were respectively entitled immediately before the commencement of this Constitution.
4. While the Vice-President or any other person is discharging the functions of, or is acting as, President, or any person is discharging the functions of the Governor, he shall be entitled to the same emoluments, allowances and privileges as the President or the Governor whose functions he discharges or for whom he acts, as the case may be.
6[***]
PART C
PROVISIONS AS TO THE SPEAKER AND THE DEPUTY SPEAKER OF THE HOUSE OF THE PEOPLE AND THE CHAIRMAN AND THE DEPUTY CHAIRMAN OF THE COUNCIL OF STATES AND THE SPEAKER AND THE DEPUTY SPEAKER OF THE LEGISLATIVE ASSEMBLY 7[***] AND THE CHAIRMAN AND THE DEPUTY CHAIRMAN OF THE LEGISLATIVE COUNCIL OF 8[A STATE].
7. There shall be paid to the Speaker of the House of the People and the Chairman of the Council of States such salaries and allowances as were payable to the Speaker of the Constituent Assembly of the Dominion of India immediately before the commencement of this Constitution, and there shall be paid to the Deputy Speaker of the House of the People and to the Deputy Chairman of the Council of States such salaries and allowances as were payable to the Deputy Speaker of the Constituent Assembly of the Dominion of India immediately before such commencement.
8. There shall be paid to the Speaker and the Deputy Speaker of the Legislative Assembly 9[***] and to the Chairman and the Deputy Chairman of the Legislative Council of 10[a State] such salaries and allowances as were payable respectively to the Speaker and the Deputy Speaker of the Legislative Assembly and the President and the Deputy President of the Legislative Council of the corresponding Province immediately before the commencement of this Constitution and, where the corresponding Province had no Legislative Council immediately before such commencement, there shall be paid to the Chairman and the Deputy Chairman of the Legislative Council of the State such salaries and allowances as the Governor of the State may determine.
PART D
PROVISIONS AS TO THE JUDGES OF THE SUPREME COURT
AND OF THE HIGH COURTS 11[***]
9. (1) There shall be paid to the Judges of the Supreme Court, in respect of time spent on actual service, salary at the following rates per mensem, that is to say:—
The Chief Justice 12[10,000 rupees]
Any other Judge 13[9,000 rupees]:
Provided that if a Judge of the Supreme Court at the time of his appointment is in receipt of a pension (other than a disability or wound pension) in respect of any previous service under the Government of India or any of its predecessor Governments or under the Government of a State or any of its predecessor Governments, his salary in respect of service in the Supreme Court 14[shall be reduced—
(a) by the amount of that pension, and
(b) if he has, before such appointment, received in lieu of a portion of the pension due to him in respect of such previous service the commuted value thereof, by the amount of that portion of the pension, and
(c) if he has, before such appointment, received a retirement gratuity in respect of such previous service, by the pension equivalent of that gratuity].
(2) Every Judge of the Supreme Court shall be entitled without payment of rent to the use of an official residence.
(3) Nothing in sub-paragraph (2) of this paragraph shall apply to a Judge who, immediately before the commencement of this Constitution,—
(a) was holding office as the Chief Justice of the Federal Court and has become on such commencement the Chief Justice of the Supreme Court under clause (1) of article 374, or
(b) was holding office as any other Judge of the Federal Court and has on such commencement become a Judge (other than the Chief Justice) of the Supreme Court under the said clause,
during the period he holds office as such Chief Justice or other Judge, and every Judge who so becomes the Chief Justice or other Judge of the Supreme Court shall, in respect of time spent on actual service as such Chief Justice or other Judge, as the case may be, be entitled to receive in addition to the salary specified in sub-paragraph (1) of this paragraph as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing immediately before such commencement.
(4) Every Judge of the Supreme Court shall receive such reasonable allowances to reimburse him for expenses incurred in travelling on duty within the territory of India and shall be afforded such reasonable facilities in connection with travelling as the President may from time to time prescribe.
(5) The rights in respect of leave of absence (including leave allowances) and pension of the Judges of the Supreme Court shall be governed by the provisions which, immediately before the commencement of this Constitution, were applicable to the Judges of the Federal Court.
10. 15[(1). There shall be paid to the Judges of High Courts, in respect of time spent on actual service, salary at the following rates per mensem, that is to say,—
The Chief Justice 16[9,000 rupees]
Any other Judge17[8,000 rupees]:
Provided that if a Judge of a High Court at the time of his appointment is in receipt of a pension (other than a disability or wound pension) in respect of any previous service under the Government of India or any of its predecessor Governments or under the Government of a State or any of its predecessor Governments, his salary in respect of service in the High Court shall be reduced—
(a) by the amount of that pension, and
(b) if he has, before such appointment, received in lieu of a portion of the pension due to him in respect of such previous service the commuted value thereof, by the amount of that portion of the pension, and
(c) if he has, before such appointment, received a retirement gratuity in respect of such previous service, by the pension equivalent of that gratuity.]
(2) Every person who immediately before the commencement of this Constitution—
(a) was holding office as the Chief Justice of a High Court in any Province and has on such commencement become the Chief Justice of the High Court in the corresponding State under clause (1) of article 376, or
(b) was holding office as any other Judge of a High Court in any Province and has on such commencement become a Judge (other than the Chief Justice) of the High Court in the corresponding State under the said clause,
shall, if he was immediately before such commencement drawing a salary at a rate higher than that specified in sub-paragraph (1) of this paragraph, be entitled to receive in respect of time spent on actual service as such Chief Justice or other Judge, as the case may be, in addition to the salary specified in the said sub-paragraph as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing immediately before such commencement.
18[(3) Any person who, immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, was holding office as the Chief Justice of the High Court of a State specified in Part B of the First Schedule and has on such commencement become the Chief Justice of the High Court of a State specified in the said Schedule as amended by said Act, shall, if he was immediately before such commencement drawing any amount as allowance in addition to his salary, be entitled to receive in respect of time spent on actual service as such Chief Justice, the same amount as allowance in addition to the salary specified in sub-paragraph (1) of this paragraph.]
11. In this Part, unless the context otherwise requires—
(a) the expression ‘Chief Justice’ includes an acting Chief Justice, and a ‘Judge’ includes an ad hoc Judge;
(b) ‘actual service’ includes—
(i) time spent by a Judge on duty as a Judge or in the performance of such other functions as he may at the request of the President undertake to discharge;
(ii) vacations, excluding any time during which the Judge is absent on leave; and
(iii) joining time on transfer from a High Court to the Supreme Court or from one High Court to another.
PART E
PROVISIONS AS TO THE COMPTROLLER AND
AUDITOR-GENERAL OF INDIA
12. (1) There shall be paid to the Comptroller and Auditor-General of India a salary at the rate of four thousand19 rupees per mensem.
(2) The person who was holding office immediately before the commencement of this Constitution as Auditor-General of India and has become on such commencement the Comptroller and Auditor-General of India under article 377 shall in addition to the salary specified in sub-paragraph (1) of this paragraph be entitled to receive as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing as Auditor-General of India immediately before such commencement.
(3) The rights in respect of leave of absence and pension and the other conditions of service of the Comptroller and Auditor-General of India shall be governed or shall continue to be governed, as the case may be, by the provisions which were applicable to the Auditor-General of India immediately before the commencement of this Constitution and all references in those provisions to the Governor-General shall be construed as references to the President.
1. The words and letter “specified in Part A of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
2. Raised to Rs. 15,000 p.m. by the President’s Pension (Amendment) Act, 1985 and further raised to Rs. 20,000 p.m. by the President’s Emoluments and Pension (Amendment) Act, 1990 and further raised to Rs. 50,000 p.m. by the President’s Emoluments and Pension (Amendment) Act, 1998 (25 of 1998), sec. 2 (w.r.e.f. 1-1-1996).
3. Raised to Rs. 11,000 p.m. by the Governor’s Emoluments, Allowances and Privileges (Amendment) Act, 1987 (17 of 1987) and further raised to Rs. 36,000 p.m. by the Governors (Emoluments and Privileges) Amendment Act, 1998 (27 of 1998), sec. 2 (w.r.e.f. 1-1-1996).
4. The words “so specified” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
5. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch., for “such States”.
6. Part B omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
7. The words and letter “or a State in Part A of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
8. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch., for “any such State”.
9. The words and letter “of a State specified in Part A of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
10. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch., for “such State”.
11. The words and letter “in States in Part A of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 25 (w.e.f. 1-11-1956).
12. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, sec. 4, for “5,000 rupees” (w.e.f. 1-4-1986). Now Rs. 33,000 per mensem vide the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1998 (18 of 1998), sec. 7 (w.r.e.f. 1-1-1996).
13. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, sec. 4, for “4,000 rupees” (w.e.f. 1-4-1986). Now Rs. 30,000 per mensem vide the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1998 (18 of 1998), sec. 7 (w.r.e.f. 1-1-1996).
14. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 25, for “shall be reduced by the amount of that pension” (w.e.f. 1-11-1956).
15. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 25, for sub-paragraph (1) (w.e.f. 1-11-1956).
16. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986 (34 of 1986), sec. 4, for “4,000 rupees” (w.e.f. 1-4-1986). Now Rs. 30,000 per mensem vide the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1998 (18 of 1998), sec. 4 (w.r.e.f. 1-1-1996).
17. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986 (34 of 1986), sec. 4, for “3,500 rupees” (w.e.f. 1-4-1986). Now Rs. 26,000 per mensem vide the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1998 (18 of 1998), sec. 4 (w.r.e.f. 1-1-1996).
18. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 25, for sub-paragraphs (3) and (4) (w.e.f. 1-11-1956).
19. The Comptroller and Auditor-General of India shall be paid a salary equal to the salary of the Judges of Supreme Court vide section 3 of Act 56 of 1971. The salary of Judges of the Supreme Court has been raised to Rs. 9,000 per mensem by the Constitution (Fifty-fourth Amendment) Act, 1986 and further raised to Rs. 30,000 p.m. by the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1998 (18 of 1998), sec. 7 (w.r.e.f. 1-1-1996).
Section 398. THIRD SCHEDULE.
THIRD SCHEDULE
[Articles 75(4), 99, 124(6), 148(2), 164(3), 188 and 219]1
Forms of Oaths or Affirmations
I. Form of oath of office for a Minister for the Union:
“I, A.B., do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, 2[that I will uphold the sovereignty and integrity of India,] that I will faithfully and conscientiously discharge my duties as a Minister for the Union and that I will do right to all manner of people in accordance with the Constitution and the law, without fear or favour, affection or ill-will.”
II. Form of oath of secrecy for a Minister for the Union: -
“I, A.B., do swear in the name of God/solemnly affirm that I will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as a Minister for the Union except as may be required for the due discharge of my duties as such Minister.”
3[III. A Form of oath or affirmation to be made by a candidate for election to Parliament:-
“I, A.B., having been nominated as a candidate to fill a seat in the council of States (or the House of the People) do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established and that I will uphold the sovereignty and integrity of India.”
B Form of oath or affirmation to be made by a member of Parliament: – “I, A.B., having been elected (or nominated) a member of the Council of States (or the House of the People) do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India and that I will faithfully discharge the duty upon which I am about to enter.”]
IV Form of oath or affirmation to be made by the Judges of the Supreme Court and the Comptroller and Auditor-General of India: -
1. See also articles 84(a) and 173(a).
2. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, sec. 5.
3.Subs. by the Constitution (Sixteenth Amendment) Act, 1963, sec. 5, for Form III.
“I, A.B., having been appointed Chief Justice (or a Judge) of the Supreme Court of India (or Comptroller and Auditor-General of India) do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, 1[that I will uphold the sovereignty and integrity of India,] that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws.”
V Form of oath of office for a Minister for a State: -
“I, A.B., do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, 1[that I will uphold the sovereignty and integrity of India,] that I will faithfully and conscientiously discharge my duties as a Minister for the State of………… and that I will do right to all manner of people in accordance with the Constitution and the law without fear or favour, affection or ill-will.”
VI Form of oath of secrecy for a Minister for a State: -
“I, A.B., do swear in the name of God/solemnly affirm that I will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as a Minister for the State of ………………………………….except as may be required for the due discharge of my duties as such Minister.”
3[VII A Form of oath or affirmation to be made by a candidate for election to the Legislature of a State: -
“I, A.B., having been nominated as a candidate to fill a seat in the Legislative Assembly (or Legislative Council), do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established and that I will uphold the sovereignty and integrity of India.”
B Form of oath or affirmation to be made by a member of the Legislature of a State: -
“I, A.B., having been elected (or nominated) a member of the Legislative Assembly (or Legislative Council), do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India and that I will faithfully discharge the duty upon which I am about to enter.”]
1. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, sec. 5.
2. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, sec. 5, for Form VII.
VIII Form of oath or affirmation to be made by the Judges of a High Court: -
“I, A.B., having been appointed Chief Justice (or a Judge) of the High Court at (or of) ……………………… do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, 1[that I will uphold the sovereignty and integrity of India,] that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws.”
1. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, sec. 5.
Section 399. FOURTH SCHEDULE.
1[FOURTH SCHEDULE
[Articles 4(1) and 80(2)]
Allocation of seats in the Council of States
To each State or Union territory specified in the first column of the following table, there shall be allotted the number of seats specified in the second column thereof opposite to that State or that Union territory, as the case may be.
| 1 |
Andhra Pradesh |
18 |
| 2 |
Assam |
7 |
| 3 |
Bihar |
17[22] |
| 18[4 |
Jharkhand |
6] |
| 2[4[5. |
Goa |
1] |
| 3[4[6.] |
Gujarat |
11] |
| 5[4[7.] |
Haryana |
5] |
| 4[8.] |
Kerala |
9 |
| 4[9.] |
Madhya Pradesh |
19[11] |
| 20[10. |
Chattisgarh |
5] |
| 6[4[11.] |
Tamil Nadu] |
7[18] |
| 8[4[12.] |
Maharashtra |
19] |
| 9[4[13.] |
Karnataka] |
12 |
| 4[14.] |
Orissa |
10 |
| 4[15.] |
Punjab |
10[7] |
| 4[16.] |
Rajasthan |
10 |
| 4[17.] |
Uttar Pradesh |
11[31] |
| 21[18. |
Uttranchal |
3] |
| [19.] |
West Bengal |
16 |
| 4[20.] |
Jammu and Kashmir |
4 |
| 12[4[21.] |
Nagaland |
1] |
| 15[4[22.] |
Himachal Pradesh |
3] |
| 13[4[23.] |
Manipur |
1] |
| 4[24.] |
Tripura |
1 |
| 4[25.] |
Meghalaya |
1 |
| 14[4[26.] |
Sikkim |
1] |
| 4[27.] |
Mizoram |
1 |
| 4[28.] |
Arunachal Pradesh |
1 |
| 4[29.] |
Delhi |
3 |
| 4[30.] |
Pondicherry |
1 |
| Total |
16[233]] |
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 3, for the Fourth Sch.
2. Ins. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 6 (w.e.f. 30-5-1987).
3. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 6, (w.e.f. 1-5-1960).
4. Entry numbers have been renumbered by (i) he North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971); (ii) the State of Mizoram Act, 1986 (34 of 1986); (iii) The Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987); (iv) The Madhya Pradesh Reorganisation Act, 2000 (28 of 2000) (w.e.f. 1-11-2000); (v) The Uttar Pradesh Reorganisation Act, 2000 (29 of 2000) (w.e.f. 9-11-2000); (vi) The Bihar Reorganisation Act, 2000 (30 of 2000) (w.e.f. 15-11-2000).
5. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 9 (w.e.f. 1-11-1966).
6. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 5, for “Madras” (w.e.f. 14-1-1969).
7. Subs. by the Andhra Pradesh and Madras (Alteration of Boundries) Act, 1959 (56 of 1959), s. 8, for “17” (w.e.f. 1-4-1960).
8 Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 6 (w.e.f. 1-5-1960).
9. Subs. by the Mysore State (Alternation of name) Act, 1973 (31 of 1973), s. 5, for “Mysore” (w.e.f. 1-11-1973).
10. Subs. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 9, for “11” (w.e.f. 1-11-1966).
11. Subs. by the Uttar Pradesh Reorganisation Act, 2000 (29 of 2000), s. 7, for “34” (w.e.f. 9-11-2000).
12. Ins. by the State of Nagaland Act, 1962 (27 of 1962), s. 6 (w.e.f. 1-12-1963).
13. Subs. By the North Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 10.
14. Ins. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 4 (w.e.f. 26-4-1975).
15. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 5 (w.e.f. 25-1-1971).
16. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 6, for “232” (w.e.f. 30-5-1987).
17. Subs. By the Bihar Reorganisation Act, 2000 (30 of 2000), sec. 7 for “22” (w.e.f. 15-11-2000).
18. Ins. by the Bihar Reorganisation Act, 2000 (30 of 2000), sec. 7 (w.e.f. 15-11-2000).
19. Subs. by the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), sec. 7 for “16”.
20. Ins. by the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), sec. 7.
21. Ins. by the Uttar Pradesh Reorganisation Act, 2000 (29 of 2000), sec. 7 (w. e. f. 9-11-2000).
Section 400. FIFTH SCHEDULE.
FIFTH SCHEDULE
[Article 244(1)]
Provisions as to the Administration and Control of Scheduled Areas and Scheduled Tribes
Part A — General
1. Interpretation. -
In this Schedule, unless the context otherwise requires, the expression “State” 1[***] does not include the 2[States of Assam, 3[,4[Meghalaya, Tripura and Mizoram.]]]
2. Executive power of a State in Scheduled Areas. -
Subject to the provisions of this Schedule, the executive power of a State extends to the Scheduled Areas therein.
3. Report by the Governor 5[***] to the President regarding the administration of Scheduled Areas. -
The Governor 5[***] of each State having Scheduled Areas therein shall annually, or whenever so required by the President, make a report to the President regarding the administration of the Scheduled Areas in that State and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.
1. Interpretation. -
In this Schedule, unless the context otherwise requires, the expression “State” 1[***] does not include the 2[States of Assam, 3[,4[Meghalaya, Tripura and Mizoram.]]]
2. Executive power of a State in Scheduled Areas. -
Subject to the provisions of this Schedule, the executive power of a State extends to the Scheduled Areas therein.
3. Report by the Governor 5[***] to the President regarding the administration of Scheduled Areas. -
The Governor 5[***] of each State having Scheduled Areas therein shall annually, or whenever so required by the President, make a report to the President regarding the administration of the Scheduled Areas in that State and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.
Part B
Administration and Control of Scheduled Areas and Scheduled Tribes
4. Tribes Advisory Council. -
(1) There shall be established in each State having Scheduled Areas therein and, if the President so directs, also in any State having Scheduled Tribes but not Scheduled Areas therein, a Tribes Advisory Council consisting of not more than twenty members of whom, as nearly as may be, three-fourths shall be the representatives of the Scheduled Tribes in the Legislative Assembly of the State:
Provided that if the number of representatives of the Scheduled Tribes in the Legislative Assembly of the State is less than the number of seats in the Tribes Advisory Council to be filled by such representatives, the remaining seats shall be filled by other members of those tribes.
(2) It shall be the duty of the Tribes Advisory Council to advise on such matters pertaining to the welfare and advancement of the Scheduled Tribes in the State as may be referred to them by the Governor 6[***].
(3) The Governor 5[***] may make rules prescribing or regulating, as the case may be, -
(a) The number of members of the Council, the mode of their appointment and the appointment of the Chairman of the Council and of the officers and servants thereof;
(b) The conduct of its meetings and its procedure in general; and
(c) All other incidental matters.
5. Law applicable to Scheduled Areas. -
(1) Notwithstanding anything in this Constitution, the Governor 6[***] may by public notification direct that any particular Act of Parliament or of the Legislature of the State shall not apply to a Scheduled Area or any part thereof in the State or shall apply to a Scheduled Area or any part thereof in the State subject to such exceptions and modifications as he may specify in the notification and any direction given under this sub-paragraph may be given so as to have retrospective effect.
(2) The Governor 6[***] may make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area.
In particular and without prejudice to the generality of the foregoing power, such regulations may-
(a) Prohibit or restrict the transfer of land by or among members of the Scheduled Tribes in such area;
(b) Regulate the allotment of land to members of the Scheduled Tribes in such area;
(c) Regulate the carrying on of business as money-lender by persons who lend money to members of the Scheduled Tribes in such area.
(3) In making any such regulation as is referred to in sub-paragraph (2) of this paragraph, the Governor 5[***] may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to the area in question.
(4) All regulations made under this paragraph shall be submitted forthwith to the President and, until assented to by him, shall have no effect.
(5) No regulation shall be made under this paragraph unless the Governor 5[***] making the regulation has, in the case where there is a Tribes Advisory Council for the State, consulted such Council.
Part C
Scheduled Areas
6. Scheduled Areas. -
(1) In this Constitution, the expression “Scheduled Areas” means such areas as the President may by order declare to be Scheduled Areas.
(2) The President may at any time by order
(a) Direct that the whole or any specified part of a Scheduled Area shall cease to be a Scheduled Area or a part of such an area;
7[(aa) Increase the area of any Scheduled Area in a State after consultation with the Governor of that State;]
(b) Alter, but only by way of rectification of boundaries, any Scheduled Area;
(c) On any alteration of the boundaries of a State or on the admission into the Union or the establishment of a new State, declare any territory not previously included in any State to be, or to form part of, a Scheduled Area;
7[(d) Rescind, in relation to any State or States, any order or orders made under this paragraph, and in consultation with the Governor of the State concerned, make fresh orders redefining the areas which are to be Scheduled Areas;]
And any such order may contain such incidental and consequential provisions as appear to the President to be necessary and proper, but save as aforesaid, the order made under sub-paragraph (1) of this paragraph shall not be varied by any subsequent order.
Part D
Amendment of the Schedule
7. Amendment of the Schedule. -
(1) Parliament may from time to time by law amend by way of addition, variation or repeal any of the provisions of this Schedule and, when the Schedule is so amended, any reference to this Schedule in this Constitution shall be construed as a reference to such Schedule as so amended.
(2) No such law as is mentioned in sub-paragraph (1) of this paragraph shall be deemed to be an amendment of this Constitution for the purposes of article 368.
1. The words and letters “means a State specified in Part A or Part B of the First Schedule but” omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971, (81 of 1971), s. 71, for “State of Assam” (w.e.f. 21-1-1972).
3. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for “Meghalaya and Tripura” (w.e.f. 20-2-1987).
4. Subs. By the Constitution (Forty-ninth Amendment) Act, 1984, sec. 3, for “and Meghalaya” (w. e. f. 1-4-1985).
5. The words “or Rajpramukh” omitted by the Constitution (Seventh Amendment), Act 1956, s. 29 and Sch.
6. The words “or Rajpramukh, as the case may be” omitted by the Constitution (Seventh Amendment), Act 1956, s. 29 and Sch.
7. Ins. by the Fifth Schedule to the Constitution (Amendment) Act, 1976 (101 of 1976), s. 2.
Section 401. SIXTH SCHEDULE
SIXTH SCHEDULE
[Articles 244(2) and 275(1)]
Provisions as to the Administration of Tribal Areas in 1[2[the States of Assam 3[,Meghalaya, Tripura] and Mizoram]]
1. Autonomous districts and autonomous regions.—(1) Subject to the provisions of this paragraph, the tribal areas in each item of 4[5[Parts I, II and IIA] and in Part III] of the table appended to paragraph 20 of this Schedule shall be an autonomous district.
(2) If there are different Scheduled Tribes in an autonomous district, the Governor may, by public notification, divide the area or areas inhabited by them into autonomous regions.6
(3) The Governor may, by public notification,—
(a) include any area in 4[any of the Parts] of the said table,
(b) exclude any area from 4[any of the Parts] of the said table,
(c) create a new autonomous district,
(d) increase the area of any autonomous district,
(e) diminish the area of any autonomous district,
(f) unite two or more autonomous districts or parts thereof so as to form one autonomous district,
7[(ff) alter the name of any autonomous district,]
(g) define the boundaries of any autonomous district:
Provided that no order shall be made by the Governor under clauses (c), (d), (e) and (f) of this sub-paragraph except after consideration of the report of a Commission appointed under sub-paragraph (1) of paragraph 14 of this Schedule:
8[Provided further that any order made by the Governor under this sub-paragraph may contain such incidental and consequential provisions (including any amendment of paragraph 20 and of any item in any of the Parts of the said table) as appear to the Governor to be necessary for giving effect to the provisions of the order.]
2. Constitution of District Councils and Regional Councils.—9[(1) There shall be a District Council for each autonomous district consisting of not more than thirty members, of whom not more than four persons shall be nominated by the Governor and the rest shall be elected on the basis of adult suffrage.]10
(2) There shall be a separate Regional Council for each area constituted an autonomous region under sub-paragraph (2) of paragraph 1 of this Schedule.
(3) Each District Council and each Regional Council shall be a body corporate by the name respectively of ‘the District Council of (name of district)’ and ‘the Regional Council of (name of region)’, shall have perpetual succession and a common seal and shall by the said name sue and be sued.11*
(4) Subject to the provisions of this Schedule, the administration of an autonomous district shall, in so far as it is not vested under this Schedule in any Regional Council within such district, be vested in the District Council for such district and the administration of an autonomous region shall be vested in the Regional Council for such region.
(5) In an autonomous district with Regional Councils, the District Council shall have only such powers with respect to the areas under the authority of the Regional Council as may be delegated to it by the Regional Council in addition to the powers conferred on it by this Schedule with respect to such areas.
(6) The Governor shall make rules for the first constitution of District Councils and Regional Councils in consultation with the existing tribal Councils or other representative tribal organisations within the autonomous districts or regions concerned, and such rules shall provide for—
(a) the composition of the District Councils and Regional Councils and the allocation of seats therein;
(b) the delimitation of territorial constituencies for the purpose of elections to those Councils;
(c) the qualifications for voting at such elections and the preparation of electoral rolls therefor;
(d) the qualifications for being elected at such elections as members of such Councils;
(e) the term of office of members of 12[Regional Councils];
(f) any other matter relating to or connected with elections or nominations to such Councils;
(g) the procedure and the conduct of business 13[including the power to act notwithstanding any vacancy] in the District and Regional Councils;
(h) the appointment of officers and staff of the District and Regional Councils.
13[(6A) The elected members of the District Council shall hold office for a term of five years from the date appointed for the first meeting of the Council after the general elections to the Council, unless the District Council is sooner dissolved under paragraph 16 and a nominated member shall hold office at the pleasure of the Governor:
Provided that the said period of five years may, while a Proclamation of Emergency is in operation or if circumstances exist which, in the opinion of the Governor, render the holding of elections impracticable, be extended by the Governor for a period not exceeding one year at a time and in any case where a Proclamation of Emergency is in operation not extending beyond a period of six months after the Proclamation has ceased to operate:
Provided further that a member elected to fill a casual vacancy shall hold office only for the remainder of the term of office of the member whom he replaces.]
(7) The District or the Regional Council may after its first constitution make rules 13[with the approval of the Governor] with regard to the matters specified in sub-paragraph (6) of this paragraph and may also make rules 13[with like approval] regulating—
(a) the formation of subordinate local Councils or Boards and their procedure and the conduct of their business; and
(b) generally all matters relating to the transaction of business pertaining to the administration of the district or region, as the case may be:
Provided that until rules are made by the District or the Regional Council under this sub-paragraph the rules made by the Governor under sub-paragraph (6) of this paragraph shall have effect in respect of elections to, the officers and staff of, and the procedure and the conduct of business in, each such Council.
14[***]
3. Powers of the District Councils and Regional Councils to make laws.—(1) The Regional Council for an autonomous region in respect of all areas within such region and the District Council for an autonomous district in respect of all areas within the district except those which are under the authority of Regional Councils, if any, within the district shall have power to make laws with respect to—
(a) the allotment, occupation or use, or the setting apart, of land, other than any land which is a reserved forest for the purposes of agriculture or grazing or for residential or other non-agricultural purposes or for any other purpose likely to promote the interests of the inhabitants of any village or town:
Provided that nothing in such laws shall prevent the compulsory acquisition of any land, whether occupied or unoccupied, for public purposes 15[by the Government of the State concerned] in accordance with the law for the time being in force authorising such acquisition;
(b) the management of any forest not being a reserved forest;
(c) the use of any canal or water-course for the purpose of agriculture;
(d) the regulation of the practice of jhum or other forms of shifting cultivation;
(e) the establishment of village or town committees or councils and their powers;
(f) any other matter relating to village or town administration, including village or town police and public health and sanitation;
(g) the appointment or succession of Chiefs or Headmen;
(h) the inheritance of property;
16[(i) marriage and divorce;]
(j) social customs.
(2) In this paragraph, a ‘reserved forest’ means any area which is a reserved forest under the Assam Forest Regulation, 1891, or under any other law for the time being in force in the area in question.
(3) All laws made under this paragraph shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.17#
4. Administration of justice in autonomous districts and autonomous regions.—(1) The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of areas within the district other than those which are under the authority of the Regional Councils, if any, within the district may constitute village councils or courts for the trial of suits and cases between the parties all of whom belong to Scheduled Tribes within such areas, other than suits and cases to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply, to the exclusion of any court in the State, and may appoint suitable persons to be members of such village councils or presiding officers of such courts, and may also appoint such officers as may be necessary for the administration of the laws made under paragraph 3 of this Schedule.
(2) Notwithstanding anything in this Constitution, the Regional Council for an autonomous region or any court constituted in that behalf by the Regional Council or, if in respect of any area within an autonomous district there is no Regional Council, the District Council for such district, or any court constituted in that behalf by the District Council, shall exercise the powers of a court of appeal in respect of all suits and cases triable by a village council or court constituted under sub-paragraph (1) of this paragraph within such region or area, as the case may be, other than those to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply, and no other court except the High Court and the Supreme Court shall have jurisdiction over such suits or cases.
(3) The High Court 18[***] shall have and exercise such jurisdiction over the suits and cases to which the provisions of sub-paragraph (2) of this paragraph apply as the Governor may from time to time by order specify.
(4) A Regional Council or District Council, as the case may be, may with the previous approval of the Governor make rules regulating—
(a) the constitution of village councils and courts and the powers to be exercised by them under this paragraph;
(b) the procedure to be followed by village councils or courts in the trial of suits and cases under sub-paragraph (1) of this paragraph;
(c) the procedure to be followed by the Regional or District Council or any court constituted by such Council in appeals and other proceedings under sub-paragraph (2) of this paragraph;
(d) the enforcement of decisions and orders of such Councils and courts;
(e) all other ancillary matters for the carrying out of the provisions of sub-paragraphs (1) and (2) of this paragraph.
19[(5) On and from such date as the President may, 20[after consulting the Government of the State concerned], by notification appoint in this behalf, this paragraph shall have effect in relation to such autonomous district or region as may be specified in the notification, as if—
(i) in sub-paragraph (1), for the words “between the parties all of whom belong to Scheduled Tribes within such areas, other than suits and cases to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply,”, the words “not being suits and cases of the nature referred to in sub- paragraph (1) of paragraph (5) of this Schedule, which the Governor may specify in this behalf,” had been substituted;
(ii) sub-paragraphs (2) and (3) had been omitted;
(iii) in sub-paragraph (4)—
(a) for the words “A Regional Council or District Council, as the case may be, may with the previous approval of the Governor make rules regulating’, the words “the Governor may make rules regulating’ had been substituted; and
(b) for clause (a), the following clause had been substituted, namely:—
(a) the constitution of village councils and courts, the powers to be exercised by them under this paragraph and the courts to which appeals from the decisions of village councils and courts shall lie;”;
(c) for clause (c), the following clause had been substituted, namely:—
“(c) the transfer of appeals and other proceedings pending before the Regional or District Council or any court constituted by such Council immediately before the date appointed by the President under sub-paragraph (5);” and
(d) in clause (e), for the words, brackets and figures “sub-paragraphs (1) and (2)”, the word, brackets and figure “sub-paragraph (1)” had been substituted.]21
5. Conferment of powers under the Code of Civil Procedure, 1908, and the Code of Criminal Procedure, 1898,22 on the Regional and District Councils and on certain courts and officers for the trial of certain suits, cases and offences.—(1) The Governor may, for the trial of suits or cases arising out of any law in force in any autonomous district or region being a law specified in that behalf by the Governor, or for the trial of offences punishable with death, transportation for life, or imprisonment for a term of not less than five years under the Indian Penal Code or under any other law for the time being applicable to such district or region, confer on the District Council or the Regional Council having authority over such district or region or on courts constituted by such District Council or on any officer appointed in that behalf by the Governor, such powers under the Code of Civil Procedure, 1908, or, as the case may be, the Code of Criminal Procedure, 18981 , as he deems appropriate, and thereupon the said Council, court or officer shall try the suits, cases or offences in exercise of the powers so conferred.
(2) The Governor may withdraw or modify any of the powers conferred on a District Council, Regional Council, court or officer under sub-paragraph (1) of this paragraph.
(3) Save as expressly provided in this paragraph, the Code of Civil Procedure, 1908, and the Code of Criminal Procedure, 18981, shall not apply to the trial of any suits, cases or offences in an autonomous district or in any autonomous region to which the provisions of this paragraph apply.
23[(4) On and from the date appointed by the President under sub-paragraph (5) of paragraph 4 in relation to any autonomous district or autonomous region, nothing contained in this paragraph shall, in its application to that district or region, be deemed to authorise the Governor to confer on the District Council or Regional Council or on courts constituted by the District Council any of the powers referred to in sub-paragraph (1) of this paragraph.]
24[6. Powers of the District Council to establish primary schools, etc.—(1) The District Council for an autonomous district may establish, construct, or manage primary schools, dispensaries, markets, 25[cattle pounds], ferries, fisheries, roads, road transport and waterways in the district and may, with the previous approval of the Governor, make regulations for the regulation and control thereof and, in particular, may prescribe the language and the manner in which primary education shall be imparted in the primary schools in the district.
(2) The Governor may, with the consent of any District Council, entrust either conditionally or unconditionally to that Council or to its officers functions in relation to agriculture, animal husbandry, community projects, co-operative societies, social welfare, village planning or any other matter to which the executive power of the State26[***] extends.]
7. District and Regional Funds.—(1) There shall be constituted for each autonomous district, a District Fund for each autonomous region, a Regional Fund to which shall be credited all moneys received respectively by the District Council for that district and the Regional Council for that region in the course of the administration of such district or region, as the case may be, in accordance with the provisions of this Constitution.
27[(2) The Governor may make rules for the management of the District Fund, or, as the case may be, the Regional Fund and for the procedure to be followed in respect of payment of money into the said Fund, the withdrawal of moneys therefrom, the custody of moneys therein and any other matter connected with or ancillary to the matters aforesaid.
(3) The accounts of the District Council or, as the case may be, the Regional Council shall be kept in such form as the Comptroller and Auditor-General of India may, with the approval of the President, prescribe.
(4) The Comptroller and Auditor-General shall cause the accounts of the District and Regional Councils to be audited in such manner as he may think fit, and the reports of the Comptroller and Auditor General relating to such accounts shall be submitted to the Governor who shall cause them to be laid before the Council.]
8. Powers to assess and collect land revenue and to impose taxes.—(1) The Regional Council for an autonomous region in respect of all lands within such region and the District Council for an autonomous district in respect of all lands within the district except those which are in the areas under the authority of Regional Councils, if any, within the district, shall have the power to assess and collect revenue in respect of such lands in accordance with the principles for the time being followed 28[by the Government of the State in assessing lands for the purpose of land revenue in the State generally].
(2) The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of all areas in the district except those which are under the authority of Regional Councils, if any, within the district, shall have power to levy and collect taxes on lands and buildings, and tolls on persons resident within such areas.
(3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say—
(a) taxes on professions, trades, callings and employments;
(b) taxes on animals, vehicles and boats;
(c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; and
(d) taxes for the maintenance of schools, dispensaries or roads.
(4) A Regional Council or District Council, as the case may be, may make regulations to provide for levy and collection of any of the taxes specified in sub-paragraphs (2) and (3) of this paragraph 29[and every such regulation shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect].
9. Licences or leases for the purpose of prospecting for, or extraction of, minerals.—(1) Such share of the royalties accruing each year from licences or leases for the purpose of prospecting for, or the extraction of, minerals granted by 30[the Government of the State] in respect of any area within an autonomous district as may be agreed upon between 30[the Government of the State] and the District Court of such district shall be made over to that District Council.
(2) If any dispute arises as to the share of such royalties to be made over to a District Council, it shall be referred to the Governor for determination and the amount determined by the Governor in his discretion shall be deemed to be the amount payable under sub-paragraph (1) of this paragraph to the District Council and the decision of the Governor shall be final.31
3210. Power of District Council to make regulations for the control of money-lending and trading by non-tribals.—(1) The District Council of an autonomous district may make regulations for the regulation and control of money-lending or trading within the district by persons other than Scheduled Tribes resident in the district.
(2) In particular and without prejudice to the generality of the foregoing power, such regulations may—
(a) prescribe that no one except the holder of a licence issued in that behalf shall carry on the business of money-lending;
(b) prescribe the maximum rate of interest which may be charged or be recovered by a money-lender;
(c) provide for the maintenance of accounts by money-lenders and for the inspection of such accounts by officers appointed in that behalf by the District Council;
(d) prescribe that no person who is not a member of the Scheduled Tribes resident in the district shall carry on wholesale or retail business in any commodity except under a licence issued in that behalf by the District Council:
Provided that no regulations may be made under this paragraph unless they are passed by a majority of not less than three-fourths of the total membership of the District Council:
Provided further that it shall not be competent under any such regulations to refuse the grant of a licence to a money-lender or a trader who has been carrying on business within the district since before the time of making of such regulations.
(3) All regulations made under this paragraph shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.33
11. Publication of laws, rules and regulations made under the Schedule.—All laws, rules and regulations made under this Schedule by a District Council or a Regional Council shall be published forthwith in the Official Gazette of the State and shall on such publication have the force of law.
3412. 35[Application of Acts of Parliament and of the Legislature of the State of Assam to autonomous districts and autonomous regions in the State of Assam].—(1) Notwithstanding anything in this Constitution—
(a) no Act of the 36[Legislature of the State of Assam] in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the 36[Legislature of the State of Assam] prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region 37[in the State] unless in either case the District Council for such district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act may direct that the Act shall in its application to such district or region or any part thereof have effect subject to such exceptions or modifications as it thinks fit; 38
(b) the Governor may, by public notification, direct that any Act of Parliament or of the 36[Legislature of the State of Assam] to which the provisions of clause (a) of this sub-paragraph do not apply shall not apply to an autonomous district or an autonomous region 37[in that State], or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification.
(2) Any direction given under sub-paragraph (1) of this paragraph may be given so as to have retrospective effect.
39[12A. Application of Acts of Parliament and of the Legislature of the State of Meghalaya to autonomous districts and autonomous regions in the State of Meghalaya.—Notwithstanding anything in this Constitution,—
(a) if any provision of a law made by a District or Regional Council in the State of Meghalaya with respect to any matter specified in sub-paragraph (1) of paragraph 3 of this Schedule or if any provision of any regulation made by a District Council or a Regional Council in that State under paragraph 8 or paragraph 10 of this Schedule, is repugnant to any provision of a law made by the Legislature of the State of Meghalaya with respect to that matter, then, the law or regulation made by the District Council or, as the case may be, the Regional Council whether made before or after the law made by the Legislature of the State of Meghalaya, shall, to the extent of repugnancy, be void and the law made by the Legislature of the State of Meghalaya shall prevail;
(b) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Meghalaya, or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
40[12AA. Application of Acts of Parliament and of the Legislature of the State of Tripura to the autonomous district and autonomous regions in the State of Tripura.—Notwithstanding anything in this Constitution—
(a) no Act of the Legislature of the State of Tripura in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the Legislature of the State of Tripura prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to the autonomous district or an autonomous region in that State unless, in either case, the District Council for that district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act direct that the Act shall, in its application to that district or such region or any part thereof, have effect subject to such exceptions or modifications as it thinks fit;
(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Tripura to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to the autonomous district or any autonomous region in that State, or shall apply to that district or such region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification;
(c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to the autonomous district or an autonomous region in the State of Tripura, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
41[12B. Application of Acts of Parliament and of the Legislature of the State of Mizoram to autonomous districts and autonomous regions in the State of Mizoram.—Notwithstanding anything in this Constitution,—
(a) no Act of the Legislature of the State of Mizoram in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of Legislature of the State of Mizoram prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region in that State unless, in either case, the District Council for such district or having jurisdiction over such region, by public notification, so directs, and the District Council, in giving such direction with respect to any Act, may direct that the Act shall, in its application to such district or region or any part thereof, have effect subject to such exceptions or modifications as it thinks fit;
(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Mizoram to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to an autonomous district or an autonomous region in that State, or shall apply to such district or region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification;
(c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Mizoram, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
13. Estimated receipts and expenditure pertaining to autonomous districts to be shown separately in the annual financial statement.—The estimated receipts and expenditure pertaining to an autonomous district which are to be credited to, or is to be made from, the Consolidated Fund of the State 42[***] shall be first placed before the District Council for discussion and then after such discussion be shown separately in the annual financial statement of the State to be laid before the Legislature of the State under article 202.
14. Appointment of Commission to inquire into and report on the administration of autonomous districts and autonomous regions.—(1) The Governor may at any time appoint a Commission to examine and report on any matter specified by him relating to the administration of the autonomous districts and autonomous regions in the State, including matters specified in clauses (c), (d), (e) and (f) of sub- paragraph (3) of paragraph 1 of this Schedule, or may appoint a Commission to inquire into and report from time to time on the administration of autonomous districts and autonomous regions in the State generally and in particular on—
(a) the provision of educational and medical facilities and communications in such districts and regions;
(b) the need for any new or special legislation in respect of such districts and regions; and
(c) the administration of the laws, rules and regulations made by the District and Regional Councils,and define the procedure to be followed by such Commission.
(2) The report of every such Commission with the recommendations of the Governor with respect thereto shall be laid before the Legislature of the State by the Minister concerned together with an explanatory memorandum regarding the action proposed to be taken thereon by 43[the Government of the State].44
(3) In allocating the business of the Government of the State among his Ministers the Governor may place one of his Ministers specially in charge of the welfare of the autonomous districts and autonomous regions in the State.
4515. Annulment or suspension of acts and resolutions of District and Regional Councils.—(1) If at any time the Governor is satisfied that an act or resolution of a District or a Regional Council is likely to endanger the safety of India 46[or is likely to be prejudicial to public order], he may annul or suspend such act or resolution and take such steps as he may consider necessary (including the suspension of the Council and the assumption to himself of all or any of the powers vested in or exercisable by the Council) to prevent the commission or continuance of such act, or the giving of effect to such resolution.
(2) Any order made by the Governor under sub-paragraph (1) of this paragraph together with the reasons therefor shall be laid before the Legislature of the State as soon as possible and the order shall, unless revoked by the Legislature of the State, continue in force for a period of twelve months from the date on which it was so made:
Provided that if and so often as a resolution approving the continuance in force of such order is passed by the Legislature of the State, the order shall unless cancelled by the Governor continue in force for a further period of twelve months from the date on which under this paragraph it would otherwise have ceased to operate.
4716. Dissolution of a District or a Regional Council.—48[(1)] The Governor may on the recommendation of a Commission appointed under paragraph 14 of this Schedule by public notification order the dissolution of a District or a Regional Council, and—
(a) direct that a fresh general election shall be held immediately for the reconstitution of the Council, or
(b) subject to the previous approval of the Legislature of the State assume the administration of the area under the authority of such Council himself or place the administration of such area under the Commission appointed under the said paragraph or any other body considered suitable by him for a period not exceeding twelve months:
Provided that when an order under clause (a) of this paragraph has been made, the Governor may take the action referred to in clause (b) of this paragraph with regard to the administration of the area in question pending the reconstitution of the Council on fresh general election:
Provided further that no action shall be taken under clause (b) of this paragraph without giving the District or the Regional Council, as the case may be, an opportunity of placing its views before the Legislature of the State.
49[(2) If at any time the Governor is satisfied that a situation has arisen in which the administration of an autonomous district or region cannot be carried on in accordance with the provisions of this Schedule, he may, by public notification assume to himself all or any of the functions or powers vested in or exercisable by the District Council or, as the case may be, the Regional Council and declare that such functions or powers shall be exercisable by such person or authority as he may specify in this behalf, for a period not exceeding six months:
Provided that the Governor may by a further order or orders extend the operation of the initial order by a period not exceeding six months on each occasion.
(3) Every order made under sub-paragraph (2) of this paragraph with the reasons therefor shall be laid before the Legislature of the State and shall cease to operate at the expiration of thirty days from the date on which the State Legislature first sits after the issue of the orders, unless, before the expiry of that period it has been approved by that State Legislature.]
17. Exclusion of areas from autonomous districts in forming constituencies in such districts.—For the purposes of elections to 50[the Legislative Assembly of Assam or Meghalaya] 51[or Tripura] 52[or Mizoram], the Governor may by order declare that any area within an autonomous district 53[in the State of Assam or Meghalaya 51[or Tripura] 52[or Mizoram], as the case may be,] shall not form part of any constituency to fill a seat or seats in the Assembly reserved for any such district but shall form part of a constituency to fill a seat or seats in the Assembly not so reserved to be specified in the order.54
55[***]
19. Transitional provisions.—(1) As soon as possible after the commencement of this Constitution the Governor shall take steps for the constitution of a District Council for each autonomous district in the State under this Schedule and, until a District Council is so constituted for an autonomous district, the administration of such district shall be vested in the Governor and the following provisions shall apply to the administration of the areas within such district instead of the foregoing provisions of this Schedule, namely:—
(a) no Act of Parliament or of the Legislature of the State shall apply to any such area unless the Governor by public notification so directs; and the Governor in giving such a direction with respect to any Act may direct that the Act shall, in its application to the area or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit;
(b) the Governor may make regulations for the peace and good government of any such area and any regulations so made may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to such area.
(2) Any direction given by the Governor under clause (a) of sub-paragraph (1) of this paragraph may be given so as to have retrospective effect.
(3) All regulations made under clause (b) of sub-paragraph (1) of this paragraph shall be submitted forthwith to the President and, until assented to by him, shall have no effect.56
57[20. Tribal areas.—(1) The areas specified in Parts I, II 3[,IIA] and III of the table below shall respectively be the tribal areas within the State of Assam, the State of Meghalaya 58[, the State of Tripura] and the 59[State] of Mizoram.
(2) 60[Any reference in Part I, Part II or Part III of the table below] to any district shall be construed as a reference to the territories comprised within the autonomous district of that name existing immediately before the day appointed under clause (b) of section 2 of the North-Eastern Areas (Reorganisation) Act, 1971:
Provided that for the purposes of clauses (e) and (f) of sub-paragraph (1) of paragraph 3, paragraph 4, paragraph 5, paragraph 6, sub-paragraph (2), clauses (a), (b) and (d) of sub-paragraph (3) and sub-paragraph (4) of paragraph 8 and clause (d) of sub-paragraph (2) of paragraph 10 of this Schedule, no part of the area comprised within the municipality of Shillong shall be deemed to be within the 61[Khasi Hills District].]
58[(3) The reference in Part IIA in the table below to the ‘Tripura Tribal Areas District’ shall be construed as a reference to the territory comprising the tribal areas specified in the First Schedule to the Tripura Tribal Areas Autonomous District Council Act, 1979.]
TABLE
PART I
1. The North Cachar Hills District.
2. 62[The Karbi Anglong District.]63
PART II
64[1. Khasi Hills District.
2. Jaintia Hills District.]
3. The Garo Hills District.
65[PART IIA
Tripura Tribal Areas District.]
PART III
66[***]
67[ 1. The Chakma District.
68[2. The Mara District.
3. The Lai District.]]
69[20A. Dissolution of the Mizo District Council.—(1) Notwithstanding anything in this Schedule, the District Council of the Mizo District existing immediately before the prescribed date (hereinafter referred to as the Mizo District Council) shall stand dissolved and cease to exist.
(2) The Administrator of the Union territory of Mizoram may, by one or more orders, provide for all or any of the following matters, namely:—
(a) the transfer, in whole or in part, of the assets, rights and liabilities of the Mizo District Council (including the rights and liabilities under any contract made by it) to the Union or to any other authority;
(b) the substitution of the Union or any other authority for the Mizo District Council, or the addition of the Union or any other authority, as a party to any legal proceedings to which the Mizo District Council is a party;
(c) the transfer or re-employment of any employees of the Mizo District Council to or by the Union or any other authority, the terms and conditions of service applicable to such employees after such transfer or re-employment;
(d) the continuance of any laws, made by the Mizo District Council and in force immediately before its dissolution, subject to such adaptations and modifications, whether by way of repeal or amendment, as the Administrator may make in this behalf, until such laws are altered, repealed or amended by a competent Legislature or other competent authority;
(e) such incidental, consequential and supplementary matters as the Administrator considers necessary.
Explanation.—In this paragraph and in paragraph 20B of this Schedule, the expression ‘prescribed date’ means the date on which the Legislative Assembly of the Union territory of Mizoram is duly constituted under and in accordance with the provisions of the Government of Union Territories Act, 1963.
70[20B. Autonomous regions in the Union territory of Mizoram to be autonomous districts and transitory provisions consequent thereto.—(1) Notwithstanding anything in this Schedule,—
(a) every autonomous region existing immediately before the prescribed date in the Union territory of Mizoram shall, on and from that date, be an autonomous district in that Union territory (hereafter referred to as the corresponding new district) and the Administrator thereof may, by one or more orders, direct that such consequential amendments as are necessary to give effect to the provisions of this clause shall be made in paragraph 20 of this Schedule (including Part III of the table appended to that paragraph) and thereupon the said paragraph and the said Part III shall be deemed to have been amended accordingly;
(b) every Regional Council of an autonomous region in the Union territory of Mizoram existing immediately before the prescribed date (hereafter referred to as the existing Regional Council) shall, on and from that date and until a District Council is duly constituted for the corresponding new district, be deemed to be the District Council of that district (hereafter referred to as the corresponding new District Council).
(2) Every member whether elected or nominated of an existing Regional Council shall be deemed to have been elected or, as the case may be, nominated to the corresponding new District Council and shall hold office until a District Council is duly constituted for the corresponding new district under this Schedule.
(3) Until rules are made under sub-paragraph (7) of paragraph 2 and sub-paragraph (4) of paragraph 4 of this Schedule by the corresponding new District Council, the rules made under the said provisions by the existing Regional Council and in force immediately before the prescribed date shall have effect in relation to the corresponding new District Council subject to such adaptations and modifications as may be made therein by the Administrator of the Union territory of Mizoram.
(4) The Administrator of the Union territory of Mizoram may, by one or more orders, provide for all or any of the following matters, namely:—
(a) the transfer in whole or in part of the assets, rights and liabilities of the existing Regional Council (including the rights and liabilities under any contract made by it) to the corresponding new District Council;
(b) the substitution of the corresponding new District Council for the existing Regional Council as a party to the legal proceedings to which the existing Regional Council is a party;
(c) the transfer or re-employment of any employees of the existing Regional Council to or by the corresponding new District Council, the terms and conditions of service applicable to such employees after such transfer or re-employment;
(d) the continuance of any laws made by the existing Regional Council and in force immediately before the prescribed date, subject to such adaptations and modifications, whether by way of repeal or amendment, as the Administrator may make in this behalf until such laws are altered, repealed or amended by a competent Legislature or other competent authority;
(e) such incidental, consequential and supplementary matters as the Administrator considers necessary.71
72[20C. Interpretation.—Subject to any provision made in this behalf, the provisions of this Schedule shall, in their application to the Union territory of Mizoram, have effect—
(1) as if references to the Governor and Government of the State were references to the Administrator of the Union territory appointed under article 239, references to State (except in the expression ‘Government of the State’) were references to the Union territory of Mizoram and references to the State Legislature were references to the Legislative Assembly of the Union territory of Mizoram;
(2) as if—
(a) in sub-paragraph (5) of paragraph 4, the provision for consultation with the Government of the State concerned had been omitted;
(b) in sub-paragraph (2) of paragraph 6, for the words ‘to which the executive power of the State extends’, the words ‘with respect to which the Legislative Assembly of the Union territory of Mizoram has power to make laws’ had been substituted;
(c) in paragraph 13, the words and figures ‘under article 202’ had been omitted.]
21. Amendment of the Schedule.—(1) Parliament may from time to time by law amend by way of addition, variation or repeal any of the provisions of this Schedule and, when the Schedule is so amended, any reference to this Schedule in this Constitution shall be construed as a reference to such Schedule as so amended.
(2) No such law as is mentioned in sub-paragraph (1) of this paragraph shall be deemed to be an amendment of this Constitution for the purposes of article 368.
—————————————-
1.Subs. by the State of Mizoram Act, 1986 (34 of 1986), sec. 39(f), for “the State of Assam, Meghalaya and Tripura and in the Union Territory of Mizoram” (w.e.f. 20-2-1987).
2.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “Assam” (w.e.f. 21-1-1972).
3.Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4, for “and Meghalaya” (w.e.f. 1-4-1985).
4.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “Part A” (w.e.f. 21-1-1972).
5.Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4, for “Parts I and II” (w.e.f. 1-4-1985).
6.Paragraph 1 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003) so as to insert after sub-paragraph (2) the following proviso; namely:—
“Provided that nothing in this sub-paragraph shall apply to the Bodoland Territorial Areas District.”
7.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
8.Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
9.Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch., for paragraph (1) (w.e.f. 2-4-1970).
10.Paragraph 2 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert after sub-paragraph (1), the following proviso, namely:—
“Provided that the Bodoland Territorial Council shall consist of not more than forty-six members of whom forty shall be elected on the basis of adult suffrage, of whom thirty shall be reserved for the Scheduled Tribes, five for non-tribal communities, five open for all communities and the remaining six shall be nominated by the Governor having same rights and privileges as other members, including voting rights, from amongst the un-represented communities of the Bodoland Territorial Areas District, of which at least two shall be women.”
11.Paragraph 2 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), so as to insert in sub-paragraph (3), the following proviso, namely:—
“Provided that the District Council constituted for the North Cachar Hills District shall be called as the North Cachar Hills Autonomous Council and the District Council constituted for the Karbi Anglong District shall be called as the Karbi Anglong Autonomus Council.”
12.Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch., for “such Councils” (w.e.f. 2-4-1970).
13.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
14.Second proviso omitted by the Assam Reorganisation (Meghalaya) Act, 1969
(55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
15.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for certain words (w.e.f. 21-1-1972).
16. Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch., for clause (i) (w.e.f. 2-4-1970).
17.Paragraph 3 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to substitute for sub-paragraph (3), the following sub-paragraph, namely:—
“(3) Save as otherwise provided in sub-paragraph (2) of paragraph 3A or sub-paragraph (2) of paragraph 3B, all laws made under this paragraph or sub-paragraph (1) of paragraph 3A or sub-paragraph (1) of paragraph 3B shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.”
Earlier sub-paragraph (3) was subs. by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), so as to read as under:
“(3) Save as otherwise provided in sub-paragraph (2) of paragraph 3A, all laws made under this paragraph or sub-paragraph (1) of paragraph 3A shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.”
18.The words “of Assam” omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
19.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
20.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for certain words (w.e.f. 21-1-1972).
21.Paragraph 4 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert after sub-paragraph (5), the following sub-paragraph, namely:—
“(6) Nothing in this paragraph shall apply to the Bodoland Territorial Council consituted under the proviso to sub-paragraph (3) of paragraph 2 of this Schedule.”
22.See now the Code of Criminal Procedure, 1973 (2 of 1974).
23.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
24.Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch., for paragraph 6 (w.e.f. 2-4-1970).
25.Subs. by the Repealing and Amending Act, 1974 (56 of 1974), sec. 4 , for “cattle ponds”.
26.The words “of Assam or Meghalaya, as the case may be,” omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
27.Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch., for sub-paragraph (2) (w.e.f. 2-4-1970).
28.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for certain words (w.e.f. 21-1-1972).
29.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969) sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
30.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “the Government of Assam” (w.e.f. 21-1-1972).
31.Paragraph 9 has been amended in its application to the States of Tripura and Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2 (w.e.f. 16-12-1988), so as to insert after sub-paragraph (2), the following sub-paragraph namely:—
“(3) The Governor may, by order, direct that the share of royalties to be made over to a District Council under this paragraph shall be made over to that Council within a period of one year from the date of any agreement under sub-paragraph (1) or, as the case may be, of any determination under sub-paragraph (2).”
32.Paragraph 10 has been amended in its application to the States of Tripura and Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2 (w.e.f. 16-12-1988), as under:
(a) in the heading, the words “by non-tribals” shall be omitted;
(b) in sub-paragraph (1), the words “other than Scheduled Tribes” shall be omitted;
(c) in sub-paragraph (2), for clause (d), the following clause shall be substituted, namely:—
“(d) prescribe that no person resident in the district shall carry on any trade, whether wholesale or retail, except under a licence issued in that behalf by the District Council.”
33.Paragraph 10 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert after sub-paragraph (3), the following sub-paragraph, namely:—
“(4) Nothing in this paragraph shall apply to the Bodoland Territorial Council constituted under the proviso to sub-paragraph (3) of paragraph 2 of this Schedule.”
34.Paragraph 12 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), so as to substitute in sub-paragraph (1), for the words and figure “matters specified in paragraph 3 of this Schedule”, the words, figures and letter “matters specified in paragraph 3 or paragraph 3A of this Schedule”.
35.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for the heading (w.e.f. 21-1-1972).
36.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “Legislature of the State” (w.e.f. 21-1-1972).
37.Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., (w.e.f. 21-1-1972).
38.Paragraph 12 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to substitute in sub-paragraph (1), in clause (a), for the words, figures and letter “matters specified in paragraph 3 or paragraph 3A of this Schedule “the words, figures and letters “matters specified in paragraph 3 or paragraph 3A or paragraph 3B of this Schedule”.
39.Paragraph 12A ins. by the Assam Reorgnisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth sch. (w.e.f. 2-4-1970) and subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
40.Subs. by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988),
sec. 2 (w.e.f. 16-12-1988), for paragraphs 12AA and 12B. Earlier paragraph 12AA was inserted by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4 (w.e.f. 1-4-1985).
41.Paragraph 12B subs. by the North-Eastern (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for paragraph 12A (w.e.f. 21-1-1972) and again subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), sec. 13 (w.e.f. 29-4-1972) and further subs. by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2 (w.e.f. 16-12-1988).
42.The words “of Assam” omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
43.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “the Government of Assam” (w.e.f. 21-1-1972).
44.Paragraph 14 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), so as to omit in sub-paragraph (2), the words “with the recommendations of the Governor with respect thereto”.
45.Paragraph 15 has been amended in its application to the States of Tripura and Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2 (w.e.f. 16-12-1988), so as to—
(a) in sub-paragraph (2), substitute for the words “by the Legislature of the State”, the words
“by him”. (b) the proviso shall be omitted.
46.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
47.Paragraph 16 has been amended in its application to the States of Tripura and Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2 (w.e.f. 16-12-1988), as under:
(a) in sub-paragraph (1), the words “subject to the previous approval of the Legislature of the State” occurring in clause (b), and the second proviso shall be omitted;
(b) for sub-paragraph (3), the following sub-paragraph shall be substituted, namely:—
“(3) Every order made under sub-paragraph (1) or sub-paragraph (2) of this paragraph, along with the reasons therefor shall be laid before the Legislature of the State.”
48.Paragraph 16 renumbered as sub-paragraph (1) thereof by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
49.Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970).
50.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for “the Legislative Assembly of Assam” (w.e.f. 21-1-1972).
51.Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4 (w.e.f. 1-4-1985).
52.Ins. by the State of Mizoram Act, 1986 (34 of 1986), sec. 39(f) (w.e.f. 20-2-1987).
53.Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
54.Paragraph 17 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert the following proviso, namely:—
“Provided that nothing in this paragraph shall apply to the Bodoland Territorial Areas District.”
55.Paragraph 18 omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
56.Paragraph 19 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert after sub-paragraph (3), the following sub-paragraph, namely:—
“(4) As soon as possible after the commencement of this Act, an Interim Executive Council for Bodoland Territorial Areas District in Assam shall be formed by the Governor from amongst leaders of the Bodo movement, including the signatories to the Memorandum of Settlement, and shall provide adequate representation to the non-tribal communities in that area:
Provided that the Interim Council shall for a period of six months during which endeavour to hold the election to the Council shall be made.
Explanation.—For the purposes of this sub-paragraph, the expression “Memorandum of Settlement” means the Memorandum signed on the 10th day of February, 2003 between Government of India, Government of Assam and Bodo Liberation Tigres.”
57.Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), sec. 71(i) and Eighth Sch., for paragraphs 20 and 20A (w.e.f. 21-1-1972). Earlier paragraph 20A was inserted by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Eighth Sch. (w.e.f. 2-4-1970).
58.Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4 (w.e.f. 1-4-1985).
59.Subs. by the State of Mizoram Act, 1986 (34 of 1986), sec. 39(f), for “Union territory” (w.e.f. 20-2-1987).
60.Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4, for “Any reference in the table below” (w.e.f. 1-4-1985).
61.Subs. by the Government of Meghalaya Notification DCA 31/72/11, dated the 14th June, 1973, published in the Gazette of Meghalaya, Pt. VA, dated 23rd June, 1973, p. 200.
62.Subs. by the Government of Assam Notification T-A D/R/115/74/47, dated 14th October, 1976, for “The Mikir Hills District”.
63.Paragraph 20 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2, so as to insert in Part I of the Table, after entry 2, the following, namely:—
“3. The Bodoland Territorial Areas District.”.
64.Subs. by the Government of Meghalaya Notification DCA 31/72/11, dated 14th June, 1973, published in the Gazette of Meghalaya, Pt. VA, dated 23rd June, 1973, p. 200
65.Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, sec. 4 (w.e.f. 1-4-1985).
66.The words “The Mizo District” omitted by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), sec. 13 (w.e.f. 29-4-1972).
67.Ins. by the Mizoram District Councils (Miscellaneous Provisions) Order 1972, published in the Mizoram Gazette, 1972, dated the 5th May, 1972, Vol. 1, Pt. II, p. 17 (w.e.f. 29-4-1972).
68.Subs. by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988),
sec. 2 (w.e.f. 16-12-1988), for serial numbers 2 and 3 and the entries relating thereto.
69.Paragraph 20A ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), sec. 74 and Fourth Sch. (w.e.f. 2-4-1970) and subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), sec. 13 (w.e.f. 29-4-1972).
70.Paragraph 20B subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), sec. 13, for paragraph 20A (w.e.f. 29-4-1972).
71.After paragraph 20B, the following paragraph has been inserted in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), namely:—
“20BA. Exercise of discretionary powers by the Governor in the discharge of his functions.—The Governor in the discharge of his functions under sub-paragraphs (2) and (3) of paragraph 1, sub-paragraphs (1), (6), sub-paragraph (6A) excluding the first proviso and sub-paragraph (7) of paragraph 2, sub-paragraph (3) of paragraph 3, sub-paragraph (4) of paragraph 4, paragraph 5, sub-paragraph (1) of paragraph 6, sub-paragraph (2) of paragraph 7, sub-paragraph (4) of paragraph 8, sub-paragraph (3) of paragraph 9, sub-paragraph (3) of paragraph 10, sub-paragraph (1) of paragraph 14, sub-paragraph (1) of paragraph 15 and sub-paragraphs (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers and the North Cachar Hills Autonomous Council or the Karbi Anglong Autonomous Council, as the case may be, take such action as he considers necessary in his discretion.”
After paragraph 20B, the following paragraph has been inserted in its application to the State of Tripura and Mizoram, by the sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), sec. 2, namely:—
“20BB. Exercise of discretionary powers by the Governor in the discharge of his functions.—The Governor, in the discharge of his functions under sub-paragraphs (2) and (3) of paragraph 1, sub-paragraphs (1) and (7) of paragraph 2, sub-paragraph (3) of paragraph 3, sub-paragraph (4) of paragraph 4, paragraph 5, sub-paragraph (1) of paragraph 6, sub-paragraph (2) of paragraph 7, sub-paragraph (3) of paragraph 9, sub-paragraph (1) of paragraph 14, sub-paragraph (1) of paragraph 15 and sub-paragraph (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers, and if he thinks it necessary, the District Council or the Regional Council concerned, take such action as he considers necessary in his discretion.”
72.Paragraph 20C subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), sec. 13, for paragraph 20A (w.e.f. 29-4-1972).
* Paragraph 2 has been amended in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), so as to insert in sub-paragraph (3), after the proviso, the following proviso, namely:—
“Provided further that the District Council constituted for the Bodoland Territorial Areas District shall be called the Bodoland Territorial Council.”
# After paragraph 3, the following paragraph has been inserted in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), sec. 2 (w.e.f. 12-9-1995), namely:—
“3A. Additional powers of the North Cachar Hills Autonomous Council and the Karbi Anglong Autonomous Council to make law.—(1) Without prejudice to the provisions of paragraph 3, the North Cachar Hills Autonomous Council and the Karbi Anglong Autonomous Council within their respective districts, shall have power to make laws with respect to—
(a) industries, subject to the provisions of entries 7 and 52 of List I of the Seventh Schedule;
(b) communications, that is to say, roads, bridges, ferries and other means of communication not specified in List I of the Seventh Schedule; municipal tramways, ropeways, inland waterways and traffic thereon subject to the provisions of List I and List III of the Seventh Schedule with regard to such waterways; vehicles other than mechanically propelled vehicles;
(c) preservation, protection and improvement of stock and prevention of animal diseases; veterinary training and practice; cattle pounds;
(d) primary and secondary education;
(e) agriculture, including agricultural education and research, protection against pests and prevention of plant diseases;
(f) fisheries;
(g) water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I of the Seventh Schedule;
(h) social security and social insurance; employment and unemployment;
(i) flood control schemes for protection of villages, paddy fields, markets, towns, etc. (not of technical nature);
(j) theatre and dramatic performances, cinemas subject to the provisions of entry 60 of List I of the Seventh Schedule; sports entertainments and amusements;
(k) public health and sanitation, hospitals and dispensaries;
(l) minor irrigation;
(m) trade and commerce in, and the production, supply and distribution of, food stuffs, cattle fodder, raw cotton and raw jute;
(n) Libraries, museums and other similar institutions controlled or financed by the State; ancient and historical monuments and records other than those declared by or under any law made by Parliament to be of national importance; and
(o) alienation of land.
(2) All laws made by the North Cachar Hills Autonomous Council and the Karbi Anglong Autonomous Council under paragraph 3 or under this paragraph shall, in so far as they relate to matters specified in List III of the Seventh Schedule, be submitted forthwith to the Governor who shall reserve the same for the consideration of the President.
(3) When a law is reserved for the consideration of the President, the President shall declare either that he assents to the said law or that he withholds assent therefrom:
Provided that the President may direct the Governor to return the law to the North Cachar Hills Autonomous Council or the Karbi Anglong Autonomous Council, as the case may be, together with a message requesting that the said Council will reconsider the law or any specified provisions thereof and, in particular, will, consider the desirability of introducing any such amendments as he may recommend in his message and, when the law is so returned, the said Council shall consider the law accordingly within a period of six months from the date of receipt of such message and, if the law is again passed by the said Council with or without amendment it shall be presented again to the President for his consideration.”
## After paragraph 3A, the following paragraph has been inserted in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), sec. 2 (w.e.f. 7-9-2003), namely:—
“3B. Additional powers to the Bodoland Territorial Council to make laws.—(1) Without prejudice to the provisions of paragraph 3, the Bodoland Territorial Council within its areas shall have power to make laws with respect to—(i) Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases; (ii) Animal husbandry and verterinary, that is to say, preservation, protection and improvement of stock and prevention of animal diseases, veterinary training and practice, cattle pounds; (iii) Co-operation; (iv) Cultural affairs; (v) Education, that is to say, primary education, higher secondary including vocational training, adult education, college education (general); (vi) Fisheries; (vii) Flood control for protection of village, paddy fields, markets and towns (not of technical nature); (viii) Food and civil supply; (ix) Forests (other than reserved forests); (x) Handloom and textile; (xi) Health and family welfare; (xii) Intoxicating liquors, opium and derivatives, subject to the provisions of entry 84 of List I of the Seventh Schedule; (xiii) Irrigation; (xiv) Labour and employment; (xv) Land and Revenue; (xvi) Library services (financed and controlled by the State Government); (xvii) Lotteries (subject to the provisions of entry 40 of List I of the Seventh Schedule), theatres, dramatic performances and cinemas (subject to the provisions of entry 60 of List I of the Seventh Schedule); (xviii) Markets and fairs;
(xix) Municipal corporation, improvement trust, district boards and other local authorities; (xx) Museum and archaeology institutions controlled or financed by the State, ancient and historical monuments and records other than those declared by or under any law made by Parliament to be of national importance; (xxi) Panchayat and rural development; (xxii) Planning and development; (xxiii) Printing and stationery; (xxiv) Public health engineering; (xxv) Public works department; (xxvi) Publicity and public relations; (xxvii) Registration of births and deaths; (xxviii) Relief and rehabilitation; (xxix) Sericulture; (xxx) Small, cottage and rural industry subject to the provisions of entries 7 and 52 of List I of the Seventh Schedule; (xxxi) Social welfare; (xxxii) Soil conservation; (xxxiii) Sports and youth welfare; (xxxiv) Statistics; (xxxv) Tourism; (xxxvi) Transport (roads, bridges, ferries and other means of communications not specified in List I of the Seventh Schedule, municipal tramways, ropeways, inland waterways and traffic thereon subject to the provision of List I and List III of the Seventh Schedule with regard to such waterways, vehicles other than mechanically propelled vehicles); (xxxvii) Tribal research institute controlled and financed by the State Government; (xxxviii) Urban development—town and country planning; (xxxix) Weights and measures subject to the provisions of entry 50 of List I of the Seventh Schedule; and (xl) Welfare of plain tribes and backward classes:
Provided that nothing in such laws shall—
(a) extinguish or modify the existing rights and privileges of any citizen in respect of his land at the date of commencement of this Act; and
(b) disallow any citizen from acquiring land either by way of inheritance, allotment, settlement or by any other way of transfer if such citizen is otherwise eligible for such acquisition of land within the Bodoland Territorial Areas District.
(2) All laws made under paragraph 3 or under this paragraph shall in so far as they relate to matters specified in List III of the Seventh Schedule, be submitted forthwith to the Governor who shall reserve the same for the consideration of the President.
(3) When a law is reserved for the consideration of the President, the President shall declare either that he assents to the said law or that he withholds assent therefrom:
Provided that the President may direct the Governor to return the law to the Bodoland Territorial Council, together with the message requesting that the said Council will reconsider the law or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when the law is so returned, the said Council shall consider the law accordingly within a period of six months from the date of receipt of such message and, if the law is again passed by the said Council with or without amendment it shall be presented again to the President for his consideration.”
Section 402. SEVENTH SCHEDULE.
SEVENTH SCHEDULE
[Article 246]
List I—Union List
1. Defence of India and every part thereof including preparation for defence and all such acts as may be conducive in times of war to its prosecution and after its termination of effective demobilisation.
2. Naval, military and air forces; any other armed forces of the Union.
1[2A. Deployment of any armed force of the Union or any other force subject to the control of the Union or any contingent or unit thereof in any State in aid of the civil power; powers, jurisdiction, privileges and liabilities of the members of such forces while on such deployment.]
3. Delimitation of cantonment areas, local self-government in such areas, the constitution and powers within such areas of cantonment authorities and the regulation of house accommodation (including the control of rents) in such areas.
4. Naval, military and air force works.
5. Arms, firearms, ammunition and explosives.
6. Atomic energy and mineral resources necessary for its production.
7. Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war.
8. Central Bureau of Intelligence and Investigation.
9. Preventive detention for reasons connected with Defence, Foreign Affairs, or the security of India; persons subjected to such detention.
10. Foreign affairs; all matters which bring the Union into relation with any foreign country.
11. Diplomatic, consular and trade representation.
12. United Nations Organisation.
13. Participation in international conferences, associations and other bodies and implementing of decisions made thereat.
14. Entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries.
15. War and peace.
16. Foreign jurisdiction.
17. Citizenship, naturalisation and aliens.
18. Extradition.
19. Admission into, and emigration and expulsion from, India; passports and visas.
20. Pilgrimages to places outside India.
21. Piracies and crimes committed on the high seas or in the air; offences against the law of nations committed on land or the high seas or in the air.
22. Railways.
23. Highways declared by or under law made by Parliament to be national highways.
24. Shipping and navigation on inland waterways, declared by Parliament by law to be national waterways, as regards mechanically propelled vessels; the rule of the road on such waterways.
25. Maritime shipping and navigation, including shipping and navigation on tidal waters; provision of education and training for the mercantile marine and regulation of such education and training provided by States and other agencies.
26. Lighthouses, including lightships, beacons and other provisions for the safety of shipping and aircraft.
27. Ports declared by or under law made by Parliament or existing law to be major ports, including their delimitation and the constitution and powers of port authorities therein.
28. Port quarantine, including hospitals connected therewith; seamen’s and marine hospitals.
29. Airways; aircraft and air navigation; provision of aerodromes; regulation and organisation of air traffic and of aerodromes; provision for aeronautical education and training and regulation of such education and training provided by States and other agencies.
30. Carriage of passengers and goods by railway, sea or air, or by national waterways in mechanically propelled vessels.
31. Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication.
32. Property of the Union and the revenue therefrom, but as regards property situated in a State 2[***] subject to legislation by the State, save in so far as Parliament by law otherwise provides.
3[***]
34. Courts of wards for the estates of Rulers of Indian States.
35. Public debt of the Union.
36. Currency, coinage and legal tender; foreign exchange.
37. Foreign loans.
38. Reserve Bank of India.
39. Post Office Savings Bank.
40. Lotteries organised by the Government of India or the Government of a State.
41. Trade and commerce with foreign countries; import and export across customs frontiers; definition of customs frontiers.
42. Inter-State trade and commerce.
43. Incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies.
44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities.
45. Banking.
46. Bills of exchange, cheques, promissory notes and other like instruments.
47. Insurance.
48. Stock exchanges and futures markets.
49. Patents, inventions and designs; copyright; trade-marks and merchandise marks.
50. Establishment of standards of weight and measure.
51. Establishment of standards of quality for goods to be exported out of India or transported from one State to another.
52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
53. Regulation and development of oil fields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.
54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
55. Regulation of labour and safety in mines and oilfields.
56. Regulation and development of inter-State rivers and river valleys to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
57. Fishing and fisheries beyond territorial waters.
58. Manufacture, supply and distribution of salt by Union agencies, regulation and control of manufacture, supply and distribution of salt by other agencies.
59. Cultivation, manufacture, and sale for export, of opium.
60. Sanctioning of cinematograph films for exhibition.
61. Industrial disputes concerning Union employees.
62. The institutions known at the commencement of this Constitution as the National Library, the Indian Museum, the Imperial War Museum, the Victoria Memorial and the Indian War Memorial, and any other like institution financed by the Government of India wholly or in part and declared by Parliament by law to be an institution of national importance.
63. The institutions known at the commencement of this Constitution as the Banaras Hindu University, the Aligarh Muslim University and the 4[Delhi University; the University established in pursuance of article 371E;] any other institution declared by Parliament by law to be an institution of national importance.
64. Institutions for scientific or technical education financed by the Government of India wholly or in part and declared by Parliament by law to be institutions of national importance.
65. Union agencies and institutions for—
(a) professional, vocational or technical training, including the training of police officers; or
(b) the promotion of special studies or research; or
(c) scientific or technical assistance in the investigation or detection of crime.
66. Co-ordination and determination of standards in institutions for higher education or research and scientific and technical institutions.
67. Ancient and historical monuments and records, and archaeological sites and remains, 5[declared by or under law made by Parliament] to be of national importance.
68. The Survey of India, the Geological, Botanical, Zoological and Anthropological Surveys of India; Meteorological organisations.
69. Census.
70. Union Public Services; All-India Services; Union Public Service Commission.
71. Union pensions, that is to say, pensions payable by the Government of India or out of the Consolidated Fund of India.
72. Elections to Parliament, to the Legislatures of States and to the offices of President and Vice-President; the Election Commission.
73. Salaries and allowances of members of Parliament, the Chairman and Deputy Chairman of the Council of States and the Speaker and Deputy Speaker of the House of the People.
74. Powers, privileges and immunities of each House of Parliament and of the members and the Committees of each House; enforcement of attendance of persons for giving evidence or producing documents before committees of Parliament or commissions appointed by Parliament.
75. Emoluments, allowances, privileges, and rights in respect of leave of absence, of the President and Governors; salaries and allowances of the Ministers for the Union; the salaries, allowances, and rights in respect of leave of absence and other conditions of service of the Comptroller and Auditor-General.
76. Audit of the accounts of the Union and of the States.
77. Constitution, organisation, jurisdiction and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practise before the Supreme Court.
78. Constitution and Organisation 6[(including vacations)] of the High Courts except provisions as to officers and servants of High Courts; persons entitled to practise before the High Courts.
7[79. Extension of the jurisdiction of a High Court to, and exclusion of the jurisdiction of a High Court from, any Union territory.]
80. Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the Government of the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas outside that State.
81. Inter-State migration; inter-State quarantine.
82. Taxes on income other than agricultural income.
83. Duties of customs including export duties.
84. Duties of excise on tobacco and other goods manufactured or produced in India except—
(a) alcoholic liquors for human consumption.
(b) opium, Indian hemp and other narcotic drugs and narcotics,
but including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry.
85. Corporation tax.
86. Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies.
87. Estate duty in respect of property other than agricultural land.
88. Duties in respect of succession to property other than agricultural land.
89. Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freights.
90. Taxes other than stamp duties on transactions in stock exchanges and futures markets.
91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.
92. Taxes on the sale or purchase of newspapers and on advertisements published therein.
8[92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.]
9[92B. Taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce.]
10[92C. Taxes on services.]
93. Offences against laws with respect to any of the matters in this List.
94. Inquiries, surveys and statistics for the purpose of any of the matters in this List.
95. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List; admiralty jurisdiction.
96. Fees in respect of any of the matters in this List, but not including fees taken in any court.
97. Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists.
List II—State List
1. Public order (but not including 11[the use of any naval, military or Air force or any other armed force of the Union or of any other force subject to the control of the Union or of any contingent or unit thereof] in aid of the civil power).
12[2. Police (including railway and village police) subject to the provisions of entry 2A of List I.]
3. 13[***] Officers and servants of the High Court; procedure in rent and revenue courts; fees taken in all courts except the Supreme Court.
4. Prisons, reformatories, Borstal institutions and other institutions of a like nature, and persons detained therein; arrangements with other States for the use of prisons and other institutions.
5. Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.
6. Public health and sanitation; hospitals and dispensaries.
7. Pilgrimages, other than pilgrimages to places outside India.
8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
9. Relief of the disabled and unemployable.
10. Burials and burial grounds; cremations and cremation grounds.
14[***]
12. Libraries, museums and other similar institutions controlled or financed by the State; ancient and historical monuments and records other than those 15[declared by or under law made by Parliament] to be of national importance.
13. Communications, that is to say, roads, bridges, ferries, and other means of communication not specified in List I; municipal tramways; ropeways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles.
14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
15. Preservation, protection and improvement of stock and prevention of animal diseases; veterinary training and practice.
16. Pounds and the prevention of cattle trespass.
17. Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I.
18. Land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.
16[***]
21. Fisheries.
22. Courts of wards subject to the provisions of entry 34 of List I; encumbered and attached estates.
23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.
24. Industries subject to the provisions of 17[entries 7 and 52] of List I.
25. Gas and gas-works.
26. Trade and commerce within the State subject to the provisions of entry 33 of List III.
27. Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
28. Markets and fairs.
18[***]
30. Money-lending and money-lenders; relief of agricultural indebtedness.
31. Inns and inn-keepers.
32. Incorporation, regulation and winding up of corporation, other than those specified in List I, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; co-operative societies.
33. Theaters and dramatic performances; cinemas subject to the provisions of entry 60 of List I; sports, entertainments and amusements.
34. Betting and gambling.
35. Works, lands and buildings vested in or in the possession of the State.
19[***]
37. Elections to the Legislature of the State subject to the provisions of any law made by Parliament.
38. Salaries and allowances of members of the Legislature of the State, of the Speaker and Deputy Speaker of the Legislative Assembly and, if there is a Legislative Council, of the Chairman and Deputy Chairman thereof.
39. Powers, privileges and immunities of the Legislative Assembly and of the members and the committees thereof, and, if there is a Legislative Council, of that Council and of the members and the committees thereof; enforcement of attendance of persons for giving evidence or producing documents before committees of the Legislature of the State.
40. Salaries and allowances of Ministers for the State.
41. State public services; State Public Service Commission.
- State pensions, that is to say, pensions payable by the State or out of the Consolidated Fund of the State.
43. Public debt of the State.
44. Treasure trove.
45. Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues.
46. Taxes on agricultural income.
47. Duties in respect of succession to agricultural land.
48. Estate duty in respect of agricultural land.
49. Taxes on lands and buildings.
50. Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.
51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India:—
(a) alcoholic liquors for human consumption;
(b) opium, Indian hemp and other narcotic drugs and narcotics,
but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry.
52. Taxes on the entry of goods into a local area for consumption, use or sale therein.
53. Taxes on the consumption or sale of electricity.
20[54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I.]
55. Taxes on advertisements other than advertisements published in the newspapers 21[and advertisements broadcast by radio or television].
56. Taxes on goods and passengers carried by road or on inland waterways.
57. Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III.
58. Taxes on animals and boats.
59. Tolls.
60. Taxes on professions, trades, callings and employments.
61. Capitation taxes.
62. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.
64. Offences against laws with respect to any of the matters in this List.
65. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
66. Fees in respect of any of the matters in this List, but not including fees taken in any court.
List III—Concurrent List
1. Criminal law, including all matters included in the Indian Penal Code at the commencement of this Constitution but excluding offences against laws with respect to any of the matters specified in List I or List II and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power.
2. Criminal procedure, including all matters included in the Code of Criminal Procedure at the commencement of this Constitution.
3. Preventive detention for reasons connected with the security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community; persons subjected to such detention.
4. Removal from one State to another State of prisoners, accused persons and persons subjected to preventive detention for reasons specified in entry 3 of this List.
5. Marriage and divorce; infants and minors; adoption; wills, intestacy and succession; joint family and partition; all matters in respect of which parties in judicial proceedings were immediately before the commencement of this Constitution subject to their personal law.
6. Transfer of property other than agricultural land; registration of deeds and documents.
7. Contracts, including partnership, agency, contracts of carriage, and other special forms of contracts, but not including contracts relating to agricultural land.
8. Actionable wrongs.
9. Bankruptcy and insolvency.
10. Trust and Trustees.
11. Administrators-general and official trustees.
22[11A. Administration of justice; constitution and organisation of all courts, except the Supreme Court and the High Courts.]
12. Evidence and oaths; recognition of laws, public acts and records, and judicial proceedings.
13. Civil procedure, including all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation and arbitration.
14. Contempt of court, but not including contempt of the Supreme Court.
15. Vagrancy; nomadic and migratory tribes.
16. Lunacy and mental deficiency, including places for the reception or treatment of lunatics and mental deficients.
17. Prevention of cruelty to animals.
1[17A. Forests.
17B. Protection of wild animals and birds.]
18. Adulteration of foodstuffs and other goods.
19. Drugs and poisons, subject to the provisions of entry 59 of List I with respect to opium.
20. Economic and social planning.
23[20A. Population control and family planning.]
21. Commercial and industrial monopolies, combines and trusts.
22. Trade unions; industrial and labour disputes.
23. Social security and social insurance; employment and unemployment.
24. Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits.
24[25. Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labour.]
26. Legal, medical and other professions.
27. Relief and rehabilitation of persons displaced from their original place of residence by reason of the setting up of the Dominions of India and Pakistan.
28. Charities and charitable institutions, charitable and religious endowments and religious institutions.
29. Prevention of the extension from one State to another of infectious or contagious diseases or pests affecting men, animals or plants.
30. Vital statistics including registration of births and deaths.
31. Ports other than those declared by or under law made by Parliament or existing law to be major ports.
32. Shipping and navigation on inland waterways as regards mechanically propelled vessels, and the rule of the road on such waterways, and the carriage of passengers and goods on inland waterways subject to the provisions of List I with respect to national waterways.
25[33. Trade and commerce in, and the production, supply and distribution of,—
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oilcakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.]
26[33A. Weights and measures except establishment of standards.]
34. Price control.
35. Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
36. Factories.
37. Boilers.
38. Electricity.
39. Newspapers, books and printing presses.
40. Archaeological sites and remains other than those 27[declared by or under law made by Parliament] to be of national importance.
41. Custody, management and disposal of property (including agricultural land) declared by law to be evacuee property.
28[42. Acquisition and requisitioning of property.]
43. Recovery in a State of claims in respect of taxes and other public demands, including arrears of land-revenue and sums recoverable as such arrears, arising outside that State.
44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.
45. Inquiries and statistics for the purposes of any of the matters specified in List II or List III.
46. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
47. Fees in respect of any of the matters in this List, but not including fees taken in any court.
1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
2. The words and letters “specified in Part A or Part B of the First Schedule” omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch.
3. Entry 33 omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 26 (w.e.f. 1-11-1956).
4. Subs. by the Constitution (Thirty-second Amendment) Act, 1973, sec. 4, for “Delhi University and” (w.e.f. 1-7-1974).
5. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 27, for “declared by Parliament by law” (w.e.f. 1-11-1956).
6. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, sec. 12 (with retrospective effect).
7. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 29 and Sch., for entry 79.
8. Ins. by the Constitution (Sixth Amendment) Act, 1956, sec. 2 (w.e.f. 11-9-1956).
9. Ins. by the Constitution (Forty-sixth Amendment) Act, 1982, sec. 5 (w.e.f. 2-2-1983).
10. Ins. by the Constitution (Eighty-eighth Amendment) Act, 2003, sec. 4.
11. Subs. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57, for certain words (w.e.f. 3-1-1977).
12. Subs. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57, for entry 2 (w.e.f. 3-1-1977).
13. Certain words omitted by the Constitution (Forty-second (Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
14. Entry 11 omitted by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
15. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 27, for “declared by Parliament by law”.
16. Entries 19 and 20 omitted by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
17. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 28, for “entry 52”.
18. Entry 29 omitted by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
19. Entry 36 omitted by the Constitution (Seventh Amendment) Act, 1956, sec. 26 (w.e.f. 1-11-1956).
20. Subs. by the Constitution (Sixth Amendment) Act, 1956, sec. 2, for entry 54 (w.e.f. 1-11-1956).
21. Ins. by the Constitution (Forty-Second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
22. Ins. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
23. Ins. by the Constitution (Forty-second Amendment) Act, 1976,
sec. 57 (w.e.f. 3-1-1977).
24. Subs. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57, for entry 25 (w.e.f. 3-1-1977).
25. Subs. by the Constitution (Third Amendment) Act, 1954, sec. 2, for entry 33.
26. Ins. by the Constitution (Forty-second Amendment) Act, 1976, sec. 57 (w.e.f. 3-1-1977).
27. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 27, for “declared by the Parliament by law” (w.e.f. 1-11-1956).
28. Subs. by the Constitution (Seventh Amendment) Act, 1956, sec. 26, for entry 42 (w.e.f. 1-11-1956).
Section 403. EIGHT SCHEDULE.
EIGHTH SCHEDULE
(Articles 344 (1) and 351]
Languages
1. Assamese.
2. Bengali.
1[3. Bodo.
4. Dogri]
2[5.] Gujarati.
3[6.] Hindi.
3[7.] Kannada.
3[8.] Kashmiri.
4[ 3[9.] Konkani.]
5[10. Maithili.]
6[ 7[11.]] Malayalam.
8[ 9[12.] Manipuri]
10[ 9[13.]] Marathi.
11[ 9[14.] Nepali.]
12[ 9[15.]] Oriya.
12[ 9[16.]] Punjabi.
12[ 9[17.]] Sanakrit.
13[18. Santhali.]
12[ 14[19.] Sindhi.]
12[ 15[20.]] Tamil.
12[ 15[21.]] Telugu.
12[ 15[22.]] Urdu.
1. Ins. by the Constitution (Ninety-second Amendment) Act, 2003, s. 2(a).
2. Entry 3 renumbered as entry 5 by s. 2(a), the Constitution (Ninety-second Amendment) Act, 2003.
3. Entries 4 to 7 renumbered as entries 6 to 9 by s. 2(b), the Constitution (Ninety-second Amendment) Act, 2003.
4. Ins. by the Constitution (Seventy-first Amendment) Act, 1992, s. 2(a).
5. Ins. by the Constitution (Ninety-second Amendment) Act, 2003, s. 2(c).
6. Entry 7 renumbered as entry 8 by s. 2(a), the Constitution (Seventy-first Amendment) Act, 1992.
7. Entry 8 renumbered as entry 11 by s.2(c), the Constitution
(Ninety-second Amendment) Act, 2003.
8. Ins. by the Constitution (Seventy-first Amendment) Act, 1992, s. 2(b).
9. Entries 9 to 14 renumbered as entries 12 to 17 by s. 2(d), the Constitution (Ninety-second Amendment) Act, 2003.
10. Entry 8 renumbered as entry 10 by s.2(b), the Constitution (Seventy-first Amendment) Act, 1992.
11. Ins. by the Constitution (Seventy-first Amendment) Act, 1992, s. 2(c).
12. Entries 9 to 15 renumbered as entries 12 to 18 and entry 15 added by s. 2(c), the Constitution (Twenty-first Amendment) Act, 1967.
13. Ins. by the Constitution (Ninety-second Amendment) Act, 2003, s. 2(e).
14. Entry 15 renumbered as entry 19 by s.2(e), the Constitution (Ninety-second Amendment) Act, 2003.
15. Entries 16 to 18 renumbered as entries 20 to 22 by s. 2(f), the Constitution (Ninety-second Amendment) Act, 2003.
Section 404. NINTH SCHEDULE
1[NINTH SCHEDULE
(Article 31B)
1. The Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950).
2. The Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay Act LXVII of 1948).
3. The Bombay Maleki Tenure Abolition Act, 1949 (Bombay Act LXI of 1949).
4. The Bombay Taluqdari Tenure Abolition Act, 1949 (Bombay Act LXII of 1949).
5. The Panch Mahals Mehwassi Tenure Abolition Act, 1949 (Bombay Act LXIII of 1949).
6. The Bombay Khoti Abolition Act, 1950 (Bombay Act VI of 1950).
7. The Bombay Paragana and Kulkarni Watan Abolition Act, 1950 (Bombay Act LX of 1950).
8. The Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Madhya Pradesh Act I of 1951).
9. The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Madras Act XXVI of 1948).
10. The Madras Estates (Abolition and Conversion into Ryotwari) Amendment Act, 1950 (Madras Act I of 1950).
11. The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (Uttar Pradesh Act I of 1951).
12. The Hyderabad (Abolition of Jagirs) Regulation, 1358F (No. LXIX of 1359, Fasli).
13. The Hyderabad Jagirs (Commutation) Regulation, 1359F (No. XXV of 1359, Fasli).]
2[14. The Bihar Displaced Persons Rehabilitation (Acquisition of Land) Act, 1950 (Bihar Act XXXVIII of 1950).
15. The United Provinces Land Acquisition (Rehabilitation of Refugees) Act, 1948 (U.P. Act XXVI of 1948).
16. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948 (Act LX of 1948).
17. Sections 52A to 52G of the Insurance Act, 1938 (Act IV of 1938), as inserted by section 42 of the Insurance (Amendment) Act, 1950 (Act XLVII of 1950).
18. The Railway Companies (Emergency Provisions) Act, 1951 (Act LI of 1951).
19. Chapter III-A of the Industries (Development and Regulation) Act, 1951 (Act LXV of 1951), as inserted by section 13 of the Industries (Development and Regulation) Amendment Act, 1953 (Act XXVI of 1953).
20. The West Bengal Land Development and Planning Act, 1948 (West Bengal Act XXI of 1948), as amended by West Bengal Act XXIX of 1951.]
3[21. The Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961 (Andhra Pradesh Act X of 1961).
22. The Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands (Validation) Act, 1961 (Andhra Pradesh Act XXI of 1961).
23. The Andhra Pradesh (Telangana Area) Ijara and Kowli Land Cancellation of Irregular Pattas and Abolition of Concessional Assessment Act, 1961 (Andhra Pradesh Act XXXVI of 1961).
24. The Assam State Acquisition of Lands belonging to Religious or Charitable Institution of Public Nature Act, 1959 (Assam Act IX of 1961).
25. The Bihar Land Reforms (Amendment) Act, 1953 (Bihar Act XX of 1954).
26. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act, 1961 (Bihar Act XII of 1962), except section 28 of this Act.
27. The Bombay Taluqdari Tenure Abolition (Amendment) Act, 1954 (Bombay Act I of 1955).
28. The Bombay Taluqdari Tenure Abolition (Amendment) Act, 1957 (Bombay Act XVIII of 1958).
29. The Bombay Inams (Kutch Area) Abolition Act, 1958 (Bombay Act XCVIII of 1958).
30. The Bombay Tenancy and Agricultural Lands (Gujarat Amendment) Act, 1960 (Gujarat Act XVI of 1960).
31. The Gujarat Agricultural Lands Ceiling Act, 1960 (Gujarat Act XXVI of 1961).
32. The Sagbara and Mehwassi Estates (Proprietary Rights Abolition, etc.) Regulation, 1962 (Gujarat Regulation I of 1962).
33. The Gujarat Surviving Alienations Abolition Act, 1963 (Gujarat Act XXXIII of 1963), except in so far as this Act relates to an alienation referred to in sub-clause (d) of clause (3) of section 2 thereof.
34. The Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 (Maharashtra Act XXVII of 1961).
35. The Hyderabad Tenancy and Agricultural Lands (Re-enactment, Validation and Further Amendment) Act, 1961 (Maharashtra Act XLV of 1961).
36. The Hyderabad Tenancy and Agricultural Lands Act, 1950 (Hyderabad Act XXI of 1950).
37. The Jenmikaram Payment (Abolition) Act, 1960 (Kerala Act III of 1961).
38. The Kerala Land Tax Act, 1961 (Kerala Act XIII of 1961).
39. The Kerala Land Reforms Act, 1963 (Kerala Act I of 1964).
40. The Madhya Pradesh Land Revenue Code, 1959 (Madhya Pradesh Act XX of 1959).
41. The Madhya Pradesh Ceiling on Agricultural Holdings Act, 1960 (Madhya Pradesh Act XX of 1960).
42. The Madras Cultivating Tenants Protection Act, 1955 (Madras Act XXV of 1955).
43. The Madras Cultivating Tenants (Payment of Fair Rent) Act, 1956 (Madras Act XXIV of 1956).
44. The Madras Occupants of Kudiyiruppu (Protection from Eviction) Act, 1961 (Madras Act XXXVIII of 1961).
45. The Madras Public Trusts (Regulation of Administration of Agricultural Lands) Act, 1961 (Madras Act LVII of 1961).
46. The Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961 (Madras Act LVIII of 1961).
47. The Mysore Tenancy Act, 1952 (Mysore Act XIII of 1952).
48. The Coorg Tenants Act, 1957 (Mysore Act XIV of 1957).
49. The Mysore Village Offices Abolition Act, 1961 (Mysore Act XIV of 1961).
50. The Hyderabad Tenancy and Agricultural Lands (Validation) Act, 1961 (Mysore Act XXXVI of 1961).
51. The Mysore Land Reforms Act, 1961 (Mysore Act X of 1962).
52. The Orissa Land Reforms Act, 1960 (Orissa Act XVI of 1960).
53. The Orissa Merged Territories (Village Offices Abolition) Act, 1963 (Orissa Act X of 1963).
54. The Punjab Security of Land Tenures Act, 1953 (Punjab Act X of 1953).
55. The Rajasthan Tenancy Act, 1955 (Rajasthan Act III of 1955).
56. The Rajasthan Zamindari and Biswedari Abolition Act, 1959 (Rajasthan Act VIII of 1959).
57. The Kumaun and Uttarakhand Zamindari Abolition and Land Reforms Act, 1960 (Uttar Pradesh Act XVII of 1960).
58. The Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 (Uttar Pradesh Act I of 1961).
59. The West Bengal Estates Acquisition Act, 1953 (West Bengal Act I of 1954).
60. The West Bengal Land Reforms Act, 1955 (West Bengal Act X of 1956).
61. The Delhi Land Reforms Act, 1954 (Delhi Act VIII of 1954).
62. The Delhi Land Holdings (Ceiling) Act, 1960 (Central Act 24 of 1960).
63. The Manipur Land Revenue and Land Reforms Act, 1960 (Central Act 33 of 1960).
64. The Tripura Land Revenue and Land Reforms Act, 1960 (Central Act 43 of 1960).
4[65. The Kerala Land Reforms (Amendment) Act, 1969 (Kerala Act 35 of 1969).
66. The Kerala Land Reforms (Amendment) Act, 1971 (Kerala Act 25 of 1971).]
5[67. The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 (Andhra Pradesh Act 1 of 1973).
68. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1972 (Bihar Act 1 of 1973).
69. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1973 (Bihar Act IX of 1973).
70. The Bihar Land Reforms (Amendment) Act, 1972 (Bihar Act V of 1972).
71. The Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972 (Gujarat Act 2 of 1974).
72. The Haryana Ceiling on Land Holdings Act, 1972 (Haryana Act 26 of 1972).
73. The Himachal Pradesh Ceiling on Land Holdings Act, 1972 (Himachal Pradesh Act 19 of 1973).
74. The Kerala Land Reforms (Amendment) Act, 1972 (Kerala Act 17 of 1972).
75. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment) Act, 1972 (Madhya Pradesh Act 12 of 1974).
76. The Madhya Pradesh Ceiling on Agricultural Holdings (Second Amendment) Act, 1972 (Madhya Pradesh Act 13 of 1974).
77. The Mysore Land Reforms (Amendment) Act, 1973 (Karnataka Act 1 of 1974).
78. The Punjab Land Reforms Act, 1972 (Punjab Act 10 of 1973).
79. The Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973 (Rajasthan Act 11 of 1973).
80. The Gudalur Janmam Estates (Abolition and Conversion into Ryotwari) Act, 1969 (Tamil Nadu Act 24 of 1969).
81. The West Bengal Land Reforms (Amendment) Act, 1972 (West Bengal Act XII of 1972).
82. The West Bengal Estates Acquisition (Amendment) Act, 1964 (West Bengal Act XXII of 1964).
83. The West Bengal Estates Acquisition (Second Amendment) Act, 1973 (West Bengal Act XXXIII of 1973).
84. The Bombay Tenancy and Agricultural Lands (Gujarat Amendment) Act, 1972 (Gujarat Act 5 of 1973).
85. The Orissa Land Reforms (Amendment) Act, 1974 (Orissa Act 9 of 1974).
86. The Tripura Land Revenue and Land Reforms (Second Amendment) Act, 1974 (Tripura Act 7 of 1974).]
6 [7[* * * * * ]]
88. The Industries (Development and Regulation) Act, 1951 (Central Act 65 of 1951).
89. The Requisitioning and Acquisition of Immovable Property Act, 1952 (Central Act 30 of 1952).
90. The Mines and Minerals (Regulation and Development) Act, 1957 (Central Act 67 of 1957).
91. The Monopolies and Restrictive Trade Practices Act, 1969 (Central Act 54 of 1969).
7[* * * * *]
93. The Coking Coal Mines (Emergency Provisions) Act, 1971 (Central Act 64 of 1971).
94. The Coking Coal Mines (Nationalisation) Act, 1972 (Central Act 36 of 1972).
95. The General Insurance Business (Nationalisation) Act, 1972 (Central Act 57 of 1972).
96. The Indian Copper Corporation (Acquistion of Undertaking) Act, 1972 (Central Act 58 of 1972).
97. The Sick Textile Undertakings (Taking Over of Management) Act, 1972 (Central Act 72 of 1972).
98. The Coal Mines (Taking Over of Management) Act, 1973 (Central Act 15 of 1973).
99. The Coal Mines (Nationalisation) Act, 1973 (Central Act 26 of 1973).
100. The Foreign Exchange Regulation Act, 1973 (Central Act 46 of 1973).
101. The Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973 (Central Act 56 of 1973).
102. The Coal Mines (Conservation and Development) Act, 1974 (Central Act 28 of 1974).
103. The Additional Emoluments (Compulsory Deposit) Act, 1974 (Central Act 37 of 1974).
104. The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (Central Act 52 of 1974).
105. The Sick Textile Undertakings (Nationalisation) Act, 1974 (Central Act 57 of 1974).
106. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1964 (Maharashtra Act XVI of 1965).
107. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1965 (Maharashtra Act XXXII of 1965).
108. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1968 (Maharashtra Act XVI of 1968).
109. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Second Amendment) Act, 1968 (Maharashtra Act XXXIII of 1968).
110. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1969 (Maharashtra Act XXXVII of 1969).
111. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Second Amendment) Act, 1969 (Maharashtra Act XXXVIII of 1969).
112. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1970 (Maharashtra Act XXVII of 1970).
113. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1972 (Maharashtra Act XIII of 1972).
114. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1973 (Maharashtra Act L of 1973).
115. The Orissa Land Reforms (Amendment) Act, 1965 (Orissa Act 13 of 1965).
116. The Orissa Land Reforms (Amendment) Act, 1966 (Orissa Act 8 of 1967).
117. The Orissa Land Reforms (Amendment) Act, 1967 (Orissa Act 13 of 1967).
118. The Orissa Land Reforms (Amendment) Act, 1969 (Orissa Act 13 of 1969).
119. The Orissa Land Reforms (Amendment) Act, 1970 (Orissa Act 18 of 1970).
120. The Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1972 (Uttar Pradesh Act 18 of 1973).
121. The Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1974 (Uttar Pradesh Act 2 of 1975).
122. The Tripura Land Revenue and Land Reforms (Third Amendment) Act, 1975 (Tripura Act 3 of 1975).
123. The Dadra and Nagar Haveli Land Reforms Regulation, 1971 (3 of 1971).
124. The Dadra and Nagar Haveli Land Reforms (Amendment) Regulation, 1973 (5 of 1973).]
8[125. Section 66A and Chapter IVA of the Motor Vehicles Act, 1939 (Central Act 4 of 1939).
126. The Essential Commodities Act, 1955 (Central Act 10 of 1955).
127. The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (Central Act 13 of 1976).
128. The Bonded Labour System (Abolition) Act, 1976 (Central Act 19 of 1976).
129. The Conservation of Foreign Exchange and Prevention of Smuggling Activities (Amendment) Act, 1976 (Central Act 20 of 1976).
9[* * * * *]
131. The Levy Sugar Price Equalisation Fund Act, 1976 (Central Act 31 of 1976).
132. The Urban Land (Ceiling and Regulation) Act, 1976 (Central Act 33 of 1976).
133. The Departmentalisation of Union Accounts (Transfer of Personnel) Act, 1976 (Central Act 59 of 1976).
134. The Assam Fixation of Ceiling on Land Holdings Act, 1956 (Assam Act I of 1957).
135. The Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958 (Bombay Act XCIX of 1958).
136. The Gujarat Private Forests (Acquisition) Act, 1972 (Gujarat Act 14 of 1973).
137. The Haryana Ceiling on Land Holding (Amendment) Act, 1976 (Haryana Act 17 of 1976).
138. The Himachal Pradesh Tenancy and Land Reforms Act, 1972 (Himachal Pradesh Act 8 of 1974).
139. The Himachal Pradesh Village Common Lands Vesting and Utilization Act, 1974 (Himachal Pradesh Act 18 of 1974).
140. The Karnataka Land Reforms (Second Amendment and Miscellaneous Provisions) Act, 1974 (Karnataka Act 31 of 1974).
141. The Karnataka Land Reforms (Second Amendment) Act, 1976 (Karnataka Act 27 of 1976).
142. The Kerala Prevention of Eviction Act, 1966 (Kerala Act 12 of 1966).
143. The Thiruppuvaram Payment (Abolition) Act, 1969 (Kerala Act 19 of 1969).
144. The Sreepadam Lands Enfranchisement Act, 1969 (Kerala Act 20 of 1969).
145. The Sree Pandaravaka Lands (Vesting and Enfranchisement) Act, 1971 (Kerala Act 20 of 1971).
146. The Kerala Private Forests (Vesting and Assignment) Act, 1971 (Kerala Act 26 of 1971).
147. The Kerala Agricultural Workers Act, 1974 (Kerala Act 18 of 1974).
148. The Kerala Cashew Factories (Acquisition) Act, 1974 (Kerala Act 29 of 1974).
149. The Kerala Chitties Act, 1975 (Kerala Act 23 of 1975).
150. The Kerala Scheduled Tribes (Restriction on Transfer of Lands and Restoration of Alienated Lands) Act, 1975 (Kerala Act 31 of 1975).
151. The Kerala Land Reforms (Amendment) Act, 1976 (Kerala Act 15 of 1976).
152. The Kanam Tenancy Abolition Act, 1976 (Kerala Act 16 of 1976).
153. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment) Act, 1974 (Madhya Pradesh Act 20 of 1974).
154. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment) Act, 1975 (Madhya Pradesh Act 2 of 1976).
155. The West Khandesh Mehwassi Estates (Proprietary Rights Abolition, etc.) Regulation, 1961 (Maharashtra Regulation 1 of 1962).
156. The Maharashtra Restoration of Lands to Scheduled Tribes Act, 1974 (Maharashtra Act XIV of 1975).
157. The Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1972 (Maharashtra Act XXI of 1975).
158. The Maharashtra Private Forests (Acquisition) Act, 1975 (Maharashtra Act XXIX of 1975).
159. The Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Amendment Act, 1975 (Maharashtra Act XLVII of 1975).
160. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Amendment) Act, 1975 (Maharashtra Act II of 1976).
161. The Orissa Estates Abolition Act, 1951 (Orissa Act I of 1952).
162. The Rajasthan Colonisation Act, 1954 (Rajasthan Act XXVII of 1954).
163. The Rajasthan Land Reforms and Acquistion of Landowners’ Estates
Act, 1963 (Rajasthan Act 11 of 1964).
164. The Rajasthan Imposition of Ceiling on Agricultural Holdings (Amendment) Act, 1976 (Rajasthan Act 8 of 1976).
165. The Rajasthan Tenancy (Amendment) Act, 1976 (Rajasthan Act 12 of 1976).
166. The Tamil Nadu Land Reforms (Reduction of Ceiling on Land) Act,
1970 (Tamil Nadu Act 17 of 1970).
167. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1971 (Tamil Nadu Act 41 of 1971).
168. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1972 (Tamil Nadu Act 10 of 1972).
169. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1972 (Tamil Nadu Act 20 of 1972).
170. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Third Amendment Act, 1972 (Tamil Nadu Act 37 of 1972).
171. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Fourth Amendment Act, 1972 (Tamil Nadu Act 39 of 1972).
172. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Sixth Amendment Act, 1972 (Tamil Nadu Act 7 of 1974).
173. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Fifth Amendment Act, 1972 (Tamil Nadu Act 10 of 1974).
174. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1974 (Tamil Nadu Act 15 of 1974).
175. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Third Amendment Act, 1974 (Tamil Nadu Act 30 of 1974).
176. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1974 (Tamil Nadu Act 32 of 1974).
177. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1975 (Tamil Nadu Act 11 of 1975).
178. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1975 (Tamil Nadu Act 21 of 1975).
179. Amendments made to the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (Uttar Pradesh Act I of 1951) by the Uttar Pradesh Land Laws (Amendment) Act, 1971 (Uttar Pradesh Act 21 of
1971) and the Uttar Pradesh Land Laws (Amendment) Act, 1974 (Uttar Pradesh Act 34 of 1974).
180. The Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1976 (Uttar Pradesh Act 20 of 1976).
181. The West Bengal Land Reforms (Second Amendment) Act, 1972 (West Bengal Act XXVIII of 1972).
182. The West Bengal Restoration of Alienated Land Act, 1973 (West Bengal Act XXIII of 1973).
183. The West Bengal Land Reforms (Amendment) Act, 1974 (West Bengal Act XXXIII of 1974).
184. The West Bengal Land Reforms (Amendment) Act, 1975 (West Bengal Act XXIII of 1975).
185. The West Bengal Land Reforms (Amendment) Act, 1976 (West Bengal Act XII of 1976).
186. The Delhi Land Holdings (Ceiling) Amendment Act, 1976 (Central Act 15 of 1976).
187. The Goa, Daman and Diu Mundkars (Protection from Eviction) Act, 1975 (Goa, Daman and Diu Act 1 of 1976).
188. The Pondicherry Land Reforms (Fixation of Ceiling on Land) Act, 1973 (Pondicherry Act 9 of 1974).]
10[189. The Assam (Temporarily Settled Areas) Tenancy Act, 1971 (Assam Act XXIII of 1971).
190. The Assam (Temporarily Settled Areas) Tenancy (Amendment) Act, 1974 (Assam Act XVIII of 1974).
191. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Amending Act, 1974 (Bihar Act 13 of 1975).
192. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of
Surplus Land) (Amendment) Act, 1976 (Bihar Act 22 of 1976).
193. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendmend) Act, 1978 (Bihar Act VII of 1978).
194. The Land Acquisition (Bihar Amendment) Act, 1979 (Bihar Act 2 of 1980).
195. The Haryana Ceiling on Land Holdings (Amendment) Act, 1977 (Haryana Act 14 of 1977).
196. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1978 (Tamil Nadu Act 25 of 1978).
197. The Tamil Nadu land reforms (Fixation of Ceiling on Land) Amendment Act, 1979 (Tamil Nadu Act 11 of 1979).
198. The Uttar Pradesh Zamindari Abolition Laws (Amendment) Act, 1978 (Uttar Pradesh Act 15 of 1978).
199. The West Bengal Restoration of Alienated Land (Amendment) Act, 1978 (West Bengal Act XXIV of 1978).
200. The West Bengal Restoration of Alienated Land (Amendment) Act, 1980 (West Bengal Act LVI of 1980).
201. The Goa, Daman and Diu Agricultural Tenancy Act, 1964 (Goa, Daman and Diu Act 7 of 1964).
202. The Goa, Daman and Diu Agricultural Tenancy (Fifth Amendment) Act, 1976 (Goa, Daman and Diu Act 17 of 1976).]
11[203. The Andhra Pradesh Scheduled Areas Land Transfer Regulation,
1959 (Andhra Pradesh Regulation 1 of 1959).
204. The Andhra Pradesh Scheduled Areas Laws (Extension and Amendment) Regulation, 1963 (Andhra Pradesh Regulation 2 of 1963).
205. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment) Regulation, 1970 (Andhra Pradesh Regulation 1 of 1970).
206. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment) Regulation, 1971 (Andhra Pradesh Regulation 1 of 1971).
207. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment) Regulation, 1978 (Andhra Pradesh Regulation 1 of 1978).
208. The Bihar Tenancy Act, 1885 (Bihar Act 8 of 1885).
209. The Chota Nagpur Tenancy Act, 1908 (Bengal Act 6 of 1908) (Chapter VIII-sections 46, 47, 48, 48A and 49; Chapter X-section 71, 71A and 71B; and Chapter XVIII-sections 240, 241 and 242).
210. The Santhal Parganas Tenancy (Supplementary Provisions) Act, 1949 (Bihar Act 14 of 1949) except section 53.
211. The Bihar Scheduled Areas Regulation, 1969 (Bihar Regulation 1 of 1969).
212. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1982 (Bihar Act 55 of 1982).
213. The Gujarat Devasthan Inams Abolition Act, 1969 (Gujarat Act 16 of
1969).
214. The Gujarat Tenancy Laws (Amendment) Act, 1976 (Gujarat Act 37 of 1976).
215. The Gujarat Agricultural Lands Ceiling (Amendment) Act, 1976 (President’s Act 43 of 1976).
216. The Gujarat Devasthan Inams Abolition (Amendment) Act, 1977 (Gujarat Act 27 of 1977).
217. The Gujarat Tenancy Laws (Amendment) Act, 1977 (Gujarat Act 30 of 1977).
218. The Bombay Land Revenue (Gujarat Second Amendment) Act, 1980 (Gujarat Act 37 of 1980).
219. The Bombay Land Revenue Code and Land Tenure Abolition Laws
(Gujarat Amendment) Act, 1982 (Gujarat Act 8 of 1982).
220. The Himachal Pradesh Transfer of Land (Regulation) Act, 1968 (Himachal Pradesh Act 15 of 1969).
221. The Himachal Pradesh Transfer of Land (Regulation) (Amendment) Act, 1986 (Himachal Pradesh Act 16 of 1986).
222. The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of certain Lands) Act, 1978 (Karnataka Act 2 of 1979).
223. The Kerala Land Reforms (Amendment) Act, 1978 (Kerala Act 13 of 1978).
224. The Kerala Land Reforms (Amendment) Act, 1981 (Kerala Act 19 of 1981).
225. The Madhya Pradesh Land Revenue Code (Third Amendment) Act, 1976 (Madhya Pradesh Act 61 of 1976).
226. The Madhya Pradesh Land Revenue Code (Amendment) Act, 1980 (Madhya Pradesh Act 15 of 1980).
227. The Madhya Pradesh Akrishik Jot Uchchatam Seema Adhiniyam, 1981 (Madhya Pradesh Act 11 of 1981).
228. The Madhya Pradesh Ceiling on Agricultural Holdings (Second Amendment) Act, 1976 (Madhya Pradesh Act 1 of 1984).
229. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment) Act, 1984 (Madhya Pradesh Act 14 of 1984).
230. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment) Act, 1989 (Madhya Pradesh Act 8 of 1989).
231. The Maharashtra Land Revenue Code, 1966 (Maharashtra Act 41 of 1966), sections 36, 36A and 36B.
232. The Maharashtra Land Revenue Code and the Maharashtra Restoration of Lands to Scheduled Tribes (Second Amendment) Act,
1976 (Maharashtra Act 30 of 1977).
233. The Maharashtra Abolition of Subsisting Proprietary Rights to Mines and Minerals in certain Lands Act, 1985 (Maharashtra Act 16 of 1985).
234. The Orissa Scheduled Areas Transfer of Immovable Property (by Scheduled Tribes) Regulation, 1956 (Orissa Regulation 2 of 1956).
235. The Orissa Land Reforms (Second Amendment) Act, 1975 (Orissa Act 29 of 1976).
236. The Orissa Land Reforms (Amendment) Act, 1976 (Orissa Act 30 of 1976).
237. The Orissa Land Reforms (Second Amendment) Act, 1976 (Orissa Act 44 of 1976).
238. The Rajasthan Colonisation (Amendment) Act, 1984 (Rajasthan Act 12 of 1984).
239. The Rajasthan Tenancy (Amendment) Act, 1984 (Rajasthan Act 13 of 1984).
240. The Rajasthan Tenancy (Amendment) Act, 1987 (Rajasthan Act 21 of 1987).
241. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1979 (Tamil Nadu Act 8 of 1980).
242. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1980 (Tamil Nadu Act 21 of 1980).
243. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1981 (Tamil Nadu Act 59 of 1981).
244. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1983 (Tamil Nadu Act 2 of 1984).
245. The Uttar Pradesh Land Laws (Amendment) Act, 1982 (Uttar Pradesh Act 20 of 1982).
246. The West Bengal Land Reforms (Amendment) Act, 1965 (West Bengal Act 18 of 1965).
247. The West Bengal Land Reforms (Amendment) Act, 1966 (West Bengal Act 11 of 1966).
248. The West Bengal Land Reforms (Second Amendment) Act, 1969 (West Bengal Act 23 of 1969).
249. The West Bengal Estate Acquisition (Amendment) Act, 1977 (West
Bengal Act 36 of 1977).
250. The West Bengal Land Holding Revenue Act, 1979 (West Bengal
Act 44 of 1979).
251. The West Bengal Land Reforms (Amendment) Act, 1980 (West Bengal Act 41 of 1980).
252. The West Bengal Land Holding Revenue (Amendment) Act, 1981 (West Bengal Act 33 of 1981).
253. The Calcutta Thikka Tenancy (Acquisition and Regulation) Act, 1981 (West Bengal Act 37 of 1981).
254. The West Bengal Land Holding Revenue (Amendment) Act, 1982 (West Bengal Act 23 of 1982).
255. The Calcutta Thikka Tenancy (Acquisition and Regulation) (Amendment) Act, 1984 (West Bengal Act 41 of 1984).
256. The Mahe Land Reforms Act, 1968 (Pondicherry Act 1 of 1968).
257. The Mahe Land Reforms (Amendment) Act, 1980 (Pondicherry Act 1
of 1981).]
12[257A. The Tamil Nadu Backward Classes, Scheduled Castes and Scheduled Tribes (Reservation of Seats in Educational Institutions and of appointments or posts in the Services under the State) Act, 1993 (Tamil Nadu Act 45 of 1994).]
13[258. The Bihar Privileged Persons Homestead Tenancy Act, 1947 (Bihar Act 4 of 1948).
259. The Bihar Consolidation of Holdings and Prevention of Fragmentation Act, 1956 (Bihar Act 22 of 1956).
260. The Bihar Consolidation of Holdings and Prevention of Fragmention (Amendment) Act, 1970 (Bihar Act 7 of 1970).
261. The Bihar Privileged Persons Homestead Tenancy (Amendment) Act, 1970 (Bihar Act 9 of 1970).
262. The Bihar Consolidation of Holdings and Prevention of Fragmentation (Amendment) Act, 1973 (Bihar Act 27 of 1975).
263. The Bihar Consolidation of Holdings and Prevention of Fragmentation (Amendment) Act, 1981 (Bihar Act 35 of 1982).
264. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of
Surplus Land) (Amendment) Act, 1987 (Bihar Act 21 of 1987).
265. The Bihar Privileged Persons Homestead Tenancy (Amendment) Act, 1989 (Bihar Act 11 of 1989).
266. The Bihar Land Reforms (Amendment) Act, 1989 (Bihar Act 11 of 1990).
267. The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition
of Transfer of Certain Lands) (Amendment) Act, 1984 (Karnataka Act 3 of 1984).
268. The Kerala Land Reforms (Amendment) Act, 1989 (Kerala Act 16 of 1989).
269. The Kerala Land Reforms (Second Amendment) Act, 1989 (Kerala Act 2 of 1990).
270. The Orissa Land Reforms (Amendment) Act, 1989 (Orissa Act 9 of 1990).
271. The Rajasthan Tenancy (Amendment) Act, 1979 (Rajasthan Act 16 of 1989).
272. The Rajasthan Colonisation (Amendment) Act, 1987 (Rajasthan Act 2 of 1987).
273. The Rajasthan Colonisation (Amendment) Act, 1989 (Rajasthan Act 12 of 1989).
274. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1983 (Tamil Nadu Act 3 of 1984).
275. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment Act, 1986 (Tamil Nadu Act 57 of 1986).
276. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1987 (Tamil Nadu Act 4 of 1988).
277. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Amendment (Amendment) Act, 1989 (Tamil Nadu Act 30 of `1989).
278. The West Bengal Land Reforms (Amendment) Act, 1981 (West Bengal Act 50 of 1981).
279. The West Bengal Land Reforms (Amendment) Act, 1986 (West Bengal Act 5 of 1986).
280. The West Bengal Land Reforms (Second Amendment) Act, 1986 (West Bengal Act 19 of 1986).
281. The West Bengal Land Reforms (Third Amendment) Act, 1986 (West Bengal Act 35 of 1986).
282. The West Bengal Land Reforms (Amendment) Act, 1989 (West Bengal Act 23 of 1989).
283. The West Bengal Land Reforms (Amendment) Act, 1990 (West Bengal Act 24 of 1990).
284. The West Bengal Land Reforms Tribunal Act, 1991 (West Bengal Act 12 of 1991).
Explanation. -
Any acquisition made under the Rajasthan Tenancy Act, 1955 (Rajasthan Act III of 1955), in contravention of the second proviso to clause (1) of article 31A shall, to the extent of the contravention, be void.]
1. Added by the Constitution (First Amendment) Act, 1951, s. 14.
2. Added by the Constitution (Fourth Amendment) Act, 1955, s. 5.
3. Added by the Constitution (Seventeenth Amendment) Act, 1964, s. 3
4. Ins. by the Constitution (Twenty-ninth Amendment) Act, 1972, s. 2.
5. Ins. by the Constitution (Thirty-fourth Amendment) Act, 1974, s. 2.
6. Ins. by the Constitution (Thirty-ninth Amendment) Act, 1975, s. 5.
7. Entry 87 and 92 omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 44 (w.e.f. 20-6-1979).
8. Ins. by the Constitution (Fortieth Amendment) Act, 1976, s. 3.
9. Entry 130 omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 44 (w.e.f. 20-6-1979).
10. Ins. by the Constitution (Forty-seventh Amendment) Act, 1984, s.2 (w.e.f 26-8-1984).
11. Ins. by the Constitution (Sixty-sixth Amendment) Act, 1990, s. 2 (w.e.f 7-6-1990).
12. Ins. by the Constitution (Seventy-sixth Amendment) Act, 1994, s. 2 (w.e.f 31-8-1994).
13. Entries 258 to 284, ins by the Constitution (Seventy-eighth Amendment) Act, 1995, s. 2 (w.e.f 30-8-1995).
Section 405. TENTH SCHEDULE
1[TENTH SCHEDULE
[Articles 102(2) and 191(2)]
Provisions as to disqualification on ground of defection
1. Interpretation.—In this Schedule, unless the context otherwise requires,—
(a) ‘House’ means either House of Parliament or the Legislative Assembly or, as the case may be, either House of the Legislature of a State;
(b) ‘legislature party’, in relation to a member of a House belonging to any political party in accordance with the provisions of paragraph 2 or 2[***] paragraph 4, means the group consisting of all the members of that House for the time being belonging to that political party in accordance with the said provisions;
(c) ‘original political party’, in relation to a member of a House, means the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2;
(d) ‘paragraph’ means a paragraph of this Schedule.
2. Disqualification on ground of defection.—(1) Subject to the provisions of 3[paragraphs 4 and 5], a member of a House belonging to any political party shall be disqualified for being a member of the House—
(a) if he has voluntarily gives up his membership of such political party; or
(b) if he votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs or by any person or authority authorised by it in this behalf, without obtaining, in either case, the prior permission of such political party, person or authority and such voting or abstention has not been condoned by such political party, person or authority within fifteen days from the date of such voting or abstention.
Explanation.—For the purposes of this sub-paragraph,—
(a) an elected member of a House shall be deemed to belong to the political party, if any, by which he was set up as a candidate for election as such member;
(b) a nominated member of a House shall,—
(i) where he is a member of any political party on the date of his nomination as such member, be deemed to belong to such political party;
(ii) in any other case, be deemed to belong to the political party of which he becomes, or, as the case may be, first becomes, a member before the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.
(2) An elected member of a House who has been elected as such otherwise than as a candidate set up by any political party shall be disqualified for being a member of the House if he joins any political party after such election.
(3) A nominated member of a House shall be disqualified for being a member of the House if he joins any political party after the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.
(4) Notwithstanding anything contained in the foregoing provisions of this paragraph, a person who, on the commencement of the Constitution (Fifty-second Amendment) Act, 1985, is a member of a House (whether elected or nominated as such) shall,—
(i) where he was a member of political party immediately before such commencement, be deemed, for the purposes of sub-paragraph (1) of this paragraph, to have been elected as a member of such House as a candidate set up by such political party;
(ii) in any other case, be deemed to be an elected member of the House who has been elected as such otherwise than as a candidate set up by any political party for the purposes of sub-paragraph (2) of this paragraph or, as the case may be, deemed to be a nominated member of the House for the purposes of sub-paragraph (3) of this paragraph.
4[***]
4. Disqualification on ground of defection not to apply in case of merger.—(1) A member of a House shall not be disqualified under sub-paragraph (1) of paragraph 2 where his original political party merges with another political party and he claims that he and any other members of his original political party—
(a) have become members of such other political party or, as the case may be, of a new political party formed by such merger; or
(b) have not accepted the merger and opted to function as a separate group,
and from the time of such merger, such other political party or new political party or group, as the case may be, shall be deemed to be the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2 and to be his original political party for the purposes of this sub-paragraph.
(2) For the purposes of sub-paragraph (1) of this paragraph, the merger of the original political party of a member of a House shall be deemed to have taken place if, and only if, not less than two-thirds of the members of the legislature party concerned have agreed to such merger.
5. Exemption.—Notwithstanding anything contained in this Schedule, a person who has been elected to the office of the Speaker or the Deputy Speaker of the House of the People or the Deputy Chairman of the Council of States or the Chairman or the Deputy Chairman of the Legislative Council of a State or the Speaker or the Deputy Speaker of the Legislative Assembly of a State, shall not be disqualified under this Schedule,—
(a) if he, by reason of his election to such office, voluntarily gives up the membership of the political party to which he belonged immediately before such election and does not, so long as he continues to hold such office thereafter, rejoin that political party or become a member of another political party; or
(b) if he, having given up by reason of his election to such office his membership of the political party to which he belonged immediately before such election, rejoins such political party after he ceases to hold such office.
6. Decision on questions as to disqualification on ground of defection.—(1) If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final:
Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.
(2) All proceedings under sub-paragraph (1) of this paragraph in relation to any question as to disqualification of a member of a House under this Schedule shall be deemed to be proceedings in Parliament within the meaning of article 122 or, as the case may be, proceedings in the Legislature of a State within the meaning of article 212.
*7. Bar of jurisdiction of courts.—Notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a member of a House under this Schedule.
8. Rules.—(1) Subject to the provisions of sub-paragraph (2) of this paragraph, the Chairman or the Speaker of a House may make rules for giving effect to the provisions of this Schedule, and in particular, and without prejudice to the generality of the foregoing, such rules may provide for—
(a) the maintenance of registers or other records as to the political parties if any, to which different members of the House belong;
(b) the report which the leader of a legislature party in relation to a member of a House shall furnish with regard to any condonation of the nature referred to in clause (b) of sub-paragraph (1) of paragraph 2 in respect of such member, the time within which and the authority to whom such report shall be furnished;
(c) the reports which a political party shall furnish with regard to admission to such political party of any members of the House and the officer of the House to whom such reports shall be furnished; and
(d) the procedure for deciding any question referred to in sub-paragraph (1) of paragraph 6 including the procedure for any inquiry which may be made for the purpose of deciding such question.
(2) The rules made by the Chairman or the Speaker of a House under sub-paragraph (1) of this paragraph shall be laid as soon as may be after they are made before the House for a total period of thirty days which may be comprised in one session or in two or more successive sessions and shall take effect upon the expiry of the said period of thirty days unless they are sooner approved with or without modifications or disapproved by the House and where they are so approved, they shall take effect on such approval in the form in which they were laid or in such modified form, as the case may be, and where they are so disapproved, they shall be of no effect.
(3) The Chairman or the Speaker of a House may, without prejudice to the provisions of article 105 or, as the case may be, article 194, and to any other power which he may have under this Constitution direct that any wilful contravention by any person of the rules made under this paragraph may be dealt with in the same manner as a breach of privilege of the House.]
——————————-
1. Added by the Constitution (Fifty-second Amendment) Act, 1985, sec. 6 (w.e.f. 1-3-1985).
2. The words “paragraph 3, or as the case may be” omitted by the Constitution (Ninety-first Amendment) Act, 2003, sec. 5(a) (w.e.f. 1-1-2004).
3. Subs. by the Constitution (Ninety-first Amendment) Act, 2003, sec. 5(b), for “paragraphs 3, 4 and 5” (w.e.f. 1-1-2004).
4. Paragraph 3 omitted by the Constitution (Ninety-first Amendment) Act, 2003, sec. 5(c) (w.e.f. 1-1-2004). Prior to omission paragraph 3 stood as under:
3. Disqualification on ground of defection not to apply in case of split.—Where a member of a House makes a claim that he and any other members of his legislature party constitute the group representing a faction which has arisen as a result of a split in his original political party and such group consists of not less than one third of the members of such legislature party,—
(a) he shall not be disqualified under sub-paragraph (1) of paragraph 2 on the ground—
(i) that he has voluntarily given up his membership of his original political party; or
(ii) that he has voted or abstained from voting in such House contrary to any direction issued by such party or by any person or authority authorised by it in that behalf without obtaining the prior permission of such party, person or authority and such voting or abstention has not been condoned by such party, person or authority within fifteen days from the date of such voting or abstention; and
(b) from the time of such split, such faction shall be deemed to be the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2 and to be his original political party for the purposes of this paragraph.
* Paragraph 7 declared invalid for want of ratification in accordance with the proviso to clause (2) of article 368 as per majority opinion in Kihota Hollohan v. Zachilhu, (1992) 1 SCC 309.
Section 406. ELEVENTH SCHEDULE
1[ELEVENTH SCHEDULE
(Article 243G)
1. Agriculture, including agricultural extension.
2. Land improvement, implementation of land reforms, land consolidation and soil conservation.
3. Minor irrigation, water management and watershed development.
4. Animal husbandry, dairying and poultry.
5. Fisheries.
6. Social forestry and farm forestry.
7. Minor forest produce.
8. Small scale industries, including food processing industries.
9. Khadi, village and cottage industries.
10. Rural housing.
11. Drinking water.
12. Fuel and fodder.
13. Roads, culverts, bridges, ferries, waterways and other means of communication.
14. Rural electrification, including distribution of electricity.
15. Non-conventional energy sources.
16. Poverty alleviation programme.
17. Education, including primary and secondary schools.
18. Technical training and vocational education.
19. Adult and non-formal education.
20. Libraries.
21. Cultural activities.
22. Markets and fairs.
23. Health and sanitation, including hospitals, primary health centres and dispensaries.
24. Family welfare.
25. Women and child development.
26. Social welfare, including welfare of the handicapped and mentally retarded.
27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.
28. Public distribution system.
29. Maintenance of community assets.]
1. Added by the Constitution (Seventy-third Amendment) Act, 1992, sec. 4 (W.e.f. 24-4-1993)
Section 407. TWELTH SCHEDULE
1[TWELTH SCHEDULE
(Article 243W)
1. Urban planning including town planning.
2. Regulation of land-use and construction of buildings.
3. Planning for economic and social development.
4. Roads and bridges.
5. Water supply for domestic, industrial and commercial purposes.
6. Public health, sanitation conservancy and solid waste management.
7. Fire services.
8. Urban forestry, protection of the environment and promotion of ecological aspects.
9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
10. Slum improvement and upgradation.
11. Urban poverty alleviation.
12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.
13. Promotion of cultural, educational and aesthetic aspects.
14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
15. Cattle pounds; prevention of cruelty to animals.
16. Vital statistics including registration of births and deaths.
17. Public amenities including street lighting, parking lots, bus stops and public conveniences.
18. Regulation of slaughter houses and tanneries.]
1. Ins. by the Constitution (Seventy-fourth Amendment) Act, 1992, sec. 4 (w.e.f. 1-6-1993)
Section 408. APPENDIX I
APPENDIX I
1[THE CONSTITUTION (APPLICATION TO JAMMU AND KASHMIR) ORDER, 1954 C.O. 48
1. Published with the Ministry of Law Notifin. No. S.R.O. 1610, dated the 14th May, 1954, Gazette of India, Extraordinary, Part II, s. 3, page 821.
In exercise of the powers conferred by clause (1) of article 370 of the Constitution, the President, with the concurrence of the Government of the State of Jammu and Kashmir, is pleased to make the following Order: -
1. (1) This Order may be called the Constitution (Application to Jammu and Kashmir) Order, 1954.
(2) It shall come into force on the fourteenth day of May, 1954 and shall thereupon supersede the Constitution (Application to Jammu and Kashmir) Order, 1950.
1[2. The provisions of the Constitution as in force on the 20th day of June, 1964 and as amended by the Constitution (Nineteenth Amendment) Act, 1966, the Constitution (Twenty-first Amendment) Act, 1967, section 5 of the Constitution (Twenty-third Amendment) Act, 1969, the Constitution (Twenty-fourth Amendment) Act, 1971, section 2 of the Constitution (Twenty-fifth Amendment) Act, 1971, the Constitution (Twenty-sixth Amendment) Act, 1971, the Constitution (Thirtieth Amendment) Act, 1972, section 2 of the Constitution (Thirty-first Amendment) Act, 1973, section 2 of the Constitution (Thirty-third Amendment) Act, 1974, sections 2, 5, 6 and 7 of the Constitution (Thirty-eighth Amendment) Act, 1975, the Constitution (Thirty-ninth Amendment) Act, 1975, the Constitution (Fortieth Amendment) Act, 1976, sections 2, 3 and 6 of the Constitution (Fifty-second Amendment) Act, 1985 and the Constitution (Sixty-first Amendment) Act, 1988 which, in addition to article 1 and article 370, shall apply in relation to the State of Jammu and Kashmir and the exceptions and modifications subject to which they shall so apply shall be as follows: -
1. The opening words have been successively amended by C.O. 56 C.O. 74, C.O. 76, C.O. 79, C.O. 89, C.O. 91, C.O. 94, C.O. 98, C.O. 103, C.O. 104, C.O. 105, C.O. 108, C.O. 136 and C.O. 141 to read as above.
(1) THE PREAMBLE.
(2) PART I.
To article 3, there shall be added the following further proviso, namely: -
“Provided further that no Bill providing for increasing or diminishing the area of the State of Jammu and Kashmir or altering the name or boundary of that State shall be introduced in Parliament without the consent of the Legislature of that State.”.
(3) PART II.
(a) This Part shall be deemed to have been applicable in relation to the State of Jammu and Kashmir as from the 26th day of January, 1950.
(b) To article 7, there shall be added the following further proviso, namely: -
“Provided further that nothing in this article shall apply to a permanent resident of the State of Jammu and Kashmir who, after having so migrated to the territory now included in Pakistan, returns to the territory of that State under a permit for resettlement in that State or permanent return issued by or under the authority of any law made by the Legislature of that State, and every such person shall be deemed to be a citizen of India.”.
(4) PART III.
(a) In article 13, references to the commencement of the Constitution shall be construed as references to the commencement of this Order.
(b) 1* * * * *
(c) In clause (3) of article 16, the reference to the State shall be construed as not including a reference to the State of Jammu and Kashmir.
(d) In article 19, for a period of 2[3[twenty-five] years] from the commencement of this Order: -
(i) In clauses (3) and (4), after the words “in the interests of”, the words “the security of the State or” shall be inserted;
(ii) In clause (5), for the words “or for the protection of the interests of any Scheduled Tribe”, the words “or in the interests of the security of the State” shall be substituted; and
(iii) The following new clause shall be added, namely: -
(iv) The words “reasonable restrictions” occurring in clauses (2), (3), (4) and (5) shall be construed as meaning such restrictions as the appropriate Legislature deems reasonable.’.
(e) In clauses (4) and (7) of article 22, for the word “Parliament”, the words “the Legislature of the State” shall be substituted.
(f) In article 31, clauses (3), (4) and (6) shall be omitted; and for clause (5), there shall be substituted the following clause, namely: -
“(5) Nothing in clause (2) shall affect-
(a) The provisions of any existing law; or
(b) The provisions of any law which the State may hereafter make-
(i) For the purpose of imposing or levying any tax or penalty; or
(ii) For the promotion of public health or the prevention of danger to life or property; or
(iii) With respect to property declared by law to be evacuee property.”.
(g) In article 31A, the proviso to clause (1) shall be omitted; and for sub-clause (a) of clause (2), the following sub-clause shall be substituted, namely: -
(a) “Estate” shall mean land which is occupied or has been let for agricultural purposes or for purposes subservient to agriculture, or for pasture, and includes-
(i) Sites of buildings and other structures on such land;
(ii) Trees standing on such land;
(iii) Forest land and wooded waste;
(iv) Area covered by or fields floating over water;
(v) Sites of jandars and gharats;
(vi) Any jagir, inam, muafi or mukarrari or other similar grant, but does not include-
(i) The site of any building in any town, or town area or village abadi or any land appurtenant to any such building or site;
(ii) Any land which is occupied as the site of a town or village; or
(iii) Any land reserved for building purposes in a municipality or notified area or cantonment or town area or any area for which a town planning scheme is sanctioned.’.
4[(h) In article 32, clause (3) shall be omitted.]
(i) In article 35-
(i) References to the commencement of the Constitution shall be construed as references to the commencement of this Order;
(ii) In clause (a) (i), the words, brackets and figures “clause (3) of article 16, clause (3) of article 32” shall be omitted; and
(iii) After clause (b), the following clause shall be added, namely: -
“(c) No law with respect to preventive detention made by the Legislature of the State of Jammu and Kashmir, whether before or after the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, shall be void on the ground that it is inconsistent with any of the provisions of this part, but any such law shall, to the extent of such inconsistency, cease to have effect on the expiration of 5[6[twenty-five] years] from the commencement of the said Order, except as respects things done or omitted to be done before the expiration thereof.”.
(j) After article 35, the following new article shall be added, namely: -
“35A. Saving of laws with respect to permanent residents and their rights. -
Notwithstanding anything contained in this Constitution, no existing law in force in the State of Jammu and Kashmir, and no law hereafter enacted by the Legislature of the State, -
(a) Defining the classes of persons who are, or shall be permanent residents of the State of Jammu and Kashmir; or
(b) Conferring on such permanent residents any special rights and privileges or imposing upon other persons any restrictions as respects-
(i) Employment under the State Government;
(ii) Acquisition of immovable property in the State;
(iii) Settlement in the State; or
(iv) Right to scholarships and such other forms of aid as the State Government may provide,
Shall be void on the ground that it is inconsistent with or takes away or abridges any rights conferred on the other citizens of India by any provision of this Part.”.
1. Cl. (b) omitted by C.O. 124.
2. Subs. by C.O. 69, for “ten years”.
3. Subs. by C.O. 97, for “twenty”.
4. Subs. by C.O. 89, for cl. (h).
5. Subs. by C.O. 69, for “ten years”.
6. Subs. by C.O. 97, for “twenty”.
(5) PART V.
1[(a) For the purposes of article 55, the population of the State of Jammu and Kashmir shall be deemed to be sixty-three lakhs.
(b) In article 81, for clauses (2) and (3), the following clauses shall be substituted, namely: -
“(2) For the purposes of sub-clause (a) of clause (1), -
(a) There shall be allotted to the State six seats in the House of the People;
(b) The State shall be divided into single member territorial constituencies by the Delimitation Commission constituted under the Delimitation Act, 1972, in accordance with such procedure as the Commission may deem fit;
(c) The constituencies shall, as far as practicable, be geographically compact areas, and in delimiting them regard shall be had to physical features, existing boundaries of administrative units, facilities of communication and public convenience; and
(d) The constituencies into which the State is divided shall not comprise the area under the occupation of Pakistan.
(3) Nothing in clause (2) shall affect the representation of the State in the House of the People until the dissolution of the House existing on the date of publication in the Gazette of India of the final order or orders of the Delimitation Commission relating to the delimitation of parliamentary constituencies under the Delimitation Act, 1972.
(4) (a) The Delimitation Commission shall associate with itself for the purpose of assisting it in its duties in respect of the State, five persons who shall be members of the House of the People representing the State.
(b) The persons to be so associated from the State shall be nominated by the Speaker of the House of the People having due regard to the composition of the House.
(c) The first nominations to be made under sub-clause (b) shall be made by the Speaker of the House of the People within two months from the commencement of the Constitution (Application to Jammu and Kashmir) Second Amendment Order, 1974.
(d) None of the associate members shall have a right to vote or to sign any decision of the Delimitation Commission.
(e) If owing to death or resignation, the office of an associate member falls vacant, it shall be filled as soon as may be practicable by the Speaker of the House of the People and in accordance with the provisions of sub-clauses (a) and (b).”.]
2[(c) In article 133, after clause (1), the following clause shall be inserted, namely: -
(1A) The provisions of section 3 of the Constitution (Thirtieth Amendment) Act, 1972, shall apply in relation to the State of Jammu and Kashmir subject to the modification that references therein to “this Act”, “the commencement of this Act”, “this Act had not been passed” and “as amended by this Act” shall be construed respectively as references to “the Constitution (Application to Jammu and Kashmir) Second Amendment Order, 1974”, “the commencement of the said Order”, “the said Order had not been made” and “as it stands after the commencement of the said Order”.’.]
3[(d)] In article 134, clause (2), after the words “Parliament may”, the words “on the request of the Legislature of the State” shall be inserted.
4[(e)] Articles 135 4*** and 139 shall be omitted.
5* * * * *
1. Subs. by C.O. 98, for cls. (a) and (b).
2. Ins., by C.O. 98
3. Cls. (c) and (d) relettered as cls. (d) and (e), by C.O. 98.
4. The figures “136” omitted by C.O. 60.
5. Cls. (f) and (g) omitted by C.O. 56.
1[(5A) PART VI.
2[(a) Articles 153 to 217, article 219, article 221, articles 223, 224, 224A and 225 and articles 227 to 237 shall be omitted.]
(b) In article 220, references to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Amendment Order, 1960.
3[(c) In article 222, after clause (1), the following new clause shall be inserted, namely: -
“(1A) Every such transfer from the High Court of Jammu and Kashmir or to that High Court shall be made after consultation with the Governor.”.]]
1. Ins. by C.O. 60 (w.e.f. 26-1-1960).
2. Subs. by C.O. 89, for cl.(a).
3. Subs. by C.O. 74, for cl. (c) (w.e.f. 24-11-1965).
(6) PART XI.
1[(a) In article 246, for the words, brackets and figures “clauses (2) and (3)” occurring in clause (1), the word, brackets and figure “clause (2)” shall be substituted, and the words, brackets and figure “Notwithstanding anything in clause (3),” occurring in clause (2) and the whole of clauses (3) and (4) shall be omitted.]
2[3[(b) For article 248, the following article shall be substituted, namely: -
“248. Residuary powers of legislation. -
Parliament has exclusive power to make any law with respect to-
4[(a) Prevention of activities involving terrorist acts directed towards overawing the Government as by law established or striking terror in the people or any section of the people or alienating any section of the people or adversely affecting the harmony amongst different sections of the people;]
5[(aa)] 6[Prevention of other activities] directed towards disclaiming, questioning or disrupting the sovereignty and territorial integrity of India or bringing about cession of a part of the territory of India or secession of a part of the territory of India from the Union or causing insult to the Indian National Flag, the Indian National Anthem and this Constitution; and
(b) Taxes on-
(i) Foreign travel by sea or air;
(ii) Inland air travel;
(iii) Postal articles, including money orders, phonograms and telegrams.”.]
6[Explanation. -
In this article, “terrorist act” means any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or any other substances (whether biological or otherwise) of a hazardous nature.]
7[(bb) In article 249, in clause (1), for the words “any matter enumerated in the State List specified in the resolution”, the words “any matter specified in the resolution, being a matter which is not enumerated in the Union List or in the Concurrent List” shall be substituted.]]
(c) In article 250, for the words “to any of the matters enumerated in the State List”, the words “also to matters not enumerated in the Union List” shall be substituted.
8* * * * *
(e) To article 253, the following proviso shall be added, namely: -
“Provided that after the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, no decision affecting the disposition of the State of Jammu and Kashmir shall be made by the Government of India without the consent of the Government of that State.”.
9* * * * *
10[(f)] article 255 shall be omitted.
11[(g)] Article 256 shall be re-numbered as clause (1) of that article, and the following new clause shall be added thereto, namely: -
“(2) The State of Jammu and Kashmir shall so exercise its executive power as to facilitate the discharge by the Union of its duties and responsibilities under the Constitution in relation to that State; and in particular, the said State shall, if so required by the Union, acquire or requisition property on behalf and at the expense of the Union, or if the property belongs to the State, transfer it to the Union on such terms as may be agreed, or in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India.”.
12* * * * *
13[(h)] In clause (2) of article 261, the words “made by Parliament” shall be omitted.
1. Subs. by C.O. 66, for cl. (a).
2. Cls. (b) and (bb) subs. by C.O. 85, for original cl.(b).
3. Subs. by C.O. 93, for cl. (b).
4. Ins. by C.O. 122.
5. Cl. (a) relettered as cl.(aa) , C.O. 122. 6. Subs., C.O. 122., for “Prevention of activities”.
7. Ins., C.O. 122.
8. Subs. by C.O. 129, for cl.(bb).
9. Cl. (d) omitted, C.O. 129.
10. Cl. (f) omitted by C.O. 66.
11. Cls. (g) and (h) relettered as cls. (f) and (g), C.O. 66.
12. Cl. (i) omitted by C.O. 56.
13. Cl. (j) relettered as cl. (i) by C.O. 56 and again relettered as cl. (h) by C.O. 66.
(7) PART XII.
1* * * * *
2[(a)] Clause (2) of article 267 , article 273, clause (2) of article 283 3[and article 290] shall be omitted.
2[(b)] In articles 266 , 282, 284, 298, 299 and 300, references to the State or States shall be construed as not including references to the State of Jammu and Kashmir.
2[(c)] In articles 277 and 295, references to the commencement of the Constitution shall be construed as references to the commencement of this order.
1. Cls. (a) and (b) ins. by C.O. 55 have been omitted by C.O. 56.
2. Cls. (a), (b) and (c) [relettered as cls. (c), (d) and (e) respectively by C.O. 55] have again been relettered as cls. (a), (b) and (c) respectively by C.O. 56.
3. Subs. by C.O. 94, for “articles 290 and 291”.
(8) PART XIII.
1***In clause (1) of article 303, the words “by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule” shall be omitted.
1* * * * *
1. Brackets and letter `(a)’ and cl. (b) omitted by C.O. 56.
(9) PART XIV.
1[In article 312, after the words “the States”, the brackets and words “(including the State of Jammu and Kashmir)” shall be inserted.]
1. Subs., by C.O. 56, for the previous modification.
1[(10) PART XV.
(a) In clause (1) of article 324, the reference to the Constitution shall, in relation to elections to either House of the Legislature of Jammu and Kashmir, be construed as a reference to the Constitution of Jammu and Kashmir.
2[(b) In articles 325, 326, 327 and 329, the reference to a State shall be construed as not including a reference to the State of Jammu and Kashmir.
(c) Article 328 shall be omitted.]
(d) In article 329, the words and figures “or article 328” shall be omitted.]]
3[(e) In article 329A, clauses (4) and (5) shall be omitted.]
1. Subs. by C.O. 60, for sub-paragraph (10) (w.e.f. 26-1-1960).
2. Subs. by C.O. 75, for cls. (b) and (c).
3. Ins. by C.O. 105.
(11) PART XVI.
1* * * * *
2[(a)] Articles 331, 332, 333,3[336 and 337] shall be omitted.
2[(b)] In articles 334 and 335, references to the State or the States shall be construed as not including references to the State of Jammu and Kashmir.
4[(c) In clause (1) of article 339, the words “the administration of the Scheduled Areas and” shall be omitted.]
1. Cl. (a) omitted by C.O. 124.
2. Cls. (b) and (c) relettered as cls. (a) and (b), C.O. 124.
3. Subs., C.O. 124., for “336, 337, 339 and 342”.
4. Ins., C.O. 124.
(12) PART XVII.
The provisions of the Part shall apply only in so far as they relate to-
(i) The official language of the Union;
(ii) The official language for communication between one State and another, or between a State and the Union; and
(iii) The language of the proceedings in the Supreme Court.
(13) PART XVIII.
(a) To article 352, the following new clause shall be added, namely: -
“1[(6)] No Proclamation of Emergency made on grounds only of internal disturbance or imminent danger thereof shall have effect in relation to the State of Jammu and Kashmir (except as respects article 354) 2[unless-
(a) It is made at the request or with the concurrence of the Government of that State, or
(b) Where it has not been so made, it is applied subsequently by the President to that State at the request or with the concurrence of the Government of that State.]”;.
3[(b) In clause (1) of article 356, references to provisions or provision of this Constitution shall, in relation to the State of Jammu and Kashmir, be construed as including references to provisions or provision of the Constitution of Jammu and Kashmir.
4[(bb) In clause (4) of article 356, after the second proviso, the following proviso shall be inserted, namely: -
“Provided also that in the case of the Proclamation issued under clause (1) on the 18th day of July, 1990 with respect to the State of Jammu and Kashmir, the reference in the first proviso to this clause to “three years” shall be construed as a reference to 5[“seven years”].]
(c) Article 360 shall be omitted.]
1. Subs. by C.O. 104, for “(4)”.
2. Subs. by C.O. 100, for certain words.
3. Subs. by C.O. 71, for cl. (b).
4. Added by C.O. 151.
5. Subs. by C.O. 162, for “six years”.
(14) PART XIX.
1* * * * *
2[(a)] 3[Article 365] shall be omitted.
4* * * * *
2[(b)] To article 367, there shall be added the following clause, namely: -
“(4) For the purposes of this Constitution as it applies in relation to the State of Jammu and Kashmir-
(a) References to this Constitution or to the provisions thereof shall be construed as references to the Constitution or the provisions thereof as applied in relation to the said State;
5[(aa)] References to the person for the time being recognised by the President on the recommendation of the Legislative Assembly of the State as the Sadar-i-Riyasat of Jammu and Kashmir, acting on the advice of the Council of Ministers of the State for the time being in office, shall be construed as references to the Governor of Jammu and Kashmir;
(b) References to the Government of the said State shall be construed as including references to the Governor of Jammu and Kashmir acting on the advice of his Council of Ministers:
Provided that in respect of any period prior to the 10th day of April, 1965, such references shall be construed as including references to the Sadar-i-Riyasat acting on the advice of his Council of Ministers;]
(c) References to a High Court shall include references to the High Court of Jammu and Kashmir;
6* * * * *
7[(d)] References to the permanent residents of the said State shall be construed as meaning persons who, before the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954 were recognised as State subjects under the laws in force in the State or who are recognised by any law made by the Legislature of the State as permanent residents of the State; and
8[(e) References to a Governor shall include references to the Governor of Jammu and Kashmir:
Provided that in respect of any period prior to the 10th day of April, 1965, such references shall be construed as references to the person recognised by the President as the Sadar-i-Riyasat of Jammu and Kashmir and as including references to any person recognised by the President as being competent to exercise the powers of the Sadar-i-Riyasat.]”.
1. Cl. (a) omitted by C.O. 74.
2. Cls. (b) and (c) relettered as cls. (a) and (b), C.O. 74.
3. Subs. by C.O. 94, for “Articles 362 and 365”.
4. Original cl. (c) omitted by C.O. 56.
5. Subs. by C.O. 74, for cl. (b).
6. Cl. (d) omitted by C.O. 56.
7. Cl. (e) relettered as cl.(d), C.O. 74.
8. Subs. by C.O. 74, for cl. (e).
(15) PART XX.
1[(a) 2[To clause (2) of article 368], the following proviso shall be added, namely: -
“Provided further that no such amendment shall have effect in relation to the State of Jammu and Kashmir unless applied by order of the President under clause (1) of article 370.”.
3[(b) After clause (3) of article 368, the following clause shall be added, namely: -
“(4) No law made by the Legislature of the State of Jammu and Kashmir seeking to make any change in or in the effect of any provision of the Constitution of Jammu and Kashmir relating to-
(a) Appointment, powers, functions, duties, emoluments, allowances, privileges or immunities of the Governor; or
(b) Superintendence, direction and control of elections by the Election Commission of India, eligibility for inclusion in the electoral rolls without discrimination, adult suffrage and composition of the Legislative Council, being matters specified in sections 138, 139, 140 and 50 of the Constitution of Jammu and Kashmir,
Shall have any effect unless such law has, after having been reserved for the consideration of the President, received his assent.”.]
1. Numbered as cl. (a) by C.O. 101.
2. Subs. by C.O. 91, for “To article 368”.
3. Ins. by C.O. 101
(16) PART XXI.
(a) Articles 369, 371, 1[371A], 2[372A], 373, clauses (1), (2), (3) and (5) of article 374 and 3[articles 376 to 378A and 392] shall be omitted.
(b) In article 372-
(i) Clauses (2) and (3) shall be omitted;
(ii) References to the laws in force in the territory of India shall include references to hidayats, ailans, ishtihars, circulars, robkars, irshads, yadashts, State Council Resolutions, Resolutions of the Constituent Assembly, and other instruments having the force of law in the territory of the State of Jammu and Kashmir; and
(iii) References to the commencement of the Constitution shall be construed as references to the commencement of this Order.
(c) In clause (4) of article 374, the reference to the authority functioning as the Privy Council of a State shall be construed as a reference to the Advisory Board constituted under the Jammu and Kashmir Constitution Act, 1996 and references to the commencement of the Constitution shall be construed as references to the commencement of this Order.
1. Ins. by C.O. 74.
2. Ins. by C.O. 56.
3. Subs., C.O. 56, for “articles 376 to 392”.
(17) PART XXII.
Articles 394 and 395 shall be omitted.
(18) FIRST SCHEDULE.
(19) SECOND SCHEDULE.
1* * * * *
1. Modification relating to paragraph 6 omitted by C.O. 56.
(20) THIRD SCHEDULE.
Forms V, VI, VII and VIII shall be omitted.
(21) FOURTH SCHEDULE.
1[(22) SEVENTH SCHEDULE.
(a) In the Union List-
(i) For entry 3, the entry “3. Administration of cantonments.” shall be substituted;
2[(ii) Entries 8, 9 3[and 34], 4*** entry 79, and the words “Inter-State migration” in entry 81 shall be omitted;]
5* * * * *
6[(iii) In entry 72, the reference to the States shall be construed, -
(a) In relation to appeals to the Supreme Court from any decision or order of the High Court of the State of Jammu and Kashmir made in an election petition whereby an election to either House of the Legislature of that State has been called in question, as including a reference to the State of Jammu and Kashmir;
(b) In relation to other matters, as not including a reference to that State]; 7[and]
8[(iv) For entry 97, the following entry shall be substituted, namely: -
9[97. Prevention of activities-
(a) Involving terrorist acts directed towards overawing the Government as by law established or striking terror in the people or any section of the people or alienating any section of the people or adversely affecting the harmony amongst different sections of the people;
(b) Directed towards disclaiming, questioning or disrupting the sovereignty and territorial integrity of India or bringing about cession of a part of the territory of India or secession of a part of the territory of India from the Union or causing insult to the Indian National Flag, the Indian National Anthem and this Constitution;
Taxes on foreign travel by sea or air, on inland air travel and on postal articles, including money orders, phonograms and telegrams.
Explanation. -
In this entry, “terrorist act” has the same meaning as in the Explanation to article 248.]”.]
(b) The State List shall be omitted.
10[(c) In the Concurrent List-
11[(i) For entry 1, the following entry shall be substituted, namely: -
“1. Criminal law (excluding offences against laws with respect to any of the matters specified in List I and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power) in so far as such criminal law relates to offences against laws with respect to any of the matters specified in the List.”];
12[13[(ia) For entry 2, the following entry shall be substituted, namely: -
“2. Criminal procedure (including prevention of offences and constitution and organisation of criminal courts, except the Supreme Court and the High Court) in so far as it relates to, -
(i) Offences against laws with respect to any matters being matters with respect to which Parliament has power to make laws; and
(ii) Administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country.”;
(ib) For entry 12, the following entry shall be substituted, namely: -
“12. Evidence and oaths in so far as they relate to, -
(i) Administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country; and
(ii) Any other matters being matters with respect to which Parliament has power to make laws.”];
(ic) For entry 13, the entry “13. Civil procedure in so far as it relates to administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country.” Shall be substituted;]
14* * * * *
15[16[(ii)] For entry 30, the entry “30. Vital statistics in so far as they relate to births and deaths including registration of births and deaths.” shall be substituted;]
17* * * * *
18[(iii) Entry 3, entries 5 to 10 (both inclusive), entries 14, 15, 17, 20, 21, 27, 28, 29, 31, 32, 37, 38, 41 and 44 shall be omitted;
(iiia) For entry 42, the entry “42. Acquisition and requisitioning of property, so far as regards acquisition of any property covered by entry 67 of List I or entry 40 of List III or of any human work of art which has artistic or aesthetic value.” shall be substituted; and]
19(iv) In entry 45, for the words and figures “List II or List III”, the words “this List” shall be substituted.]
1. Subs. by C.O. 66, for sub-paragraph (22).
2. Subs. by C.O. 85, for item (ii).
3. Subs. by C.O. 92, for “34 and 60”.
4. The words and figures `The words “and records” in entry 67’ omitted by C.O. 95.
5. Original item (iii) omitted by C.O. 74.
6. Subs. by C.O. 83, for item (iii).
7. Ins. by C.O. 85.
8. Subs. by C.O. 93, for item (iv).
9. Subs. by C.O. 122 for entry 97 (w.e.f. 4-6-1985)
10. Subs. by C.O. 69, for cl. (c).
11. Subs. by C.O. 70, for item (i).
12. Ins. by C.O. 94.
13. Subs. by C.O. 122, for sub-clauses (ia) and (ib) (w.e.f. 4-6-1985).
14. Item (ii) and (iii) omitted by C.O. 74.
15. Ins. by C.O. 70.
16. Item (iv) renumbered as item (ii) by C.O. 74.
17. Item (v) and (vi) omitted by C.O. 72.
18. Subs. by C.O. 95, for item (iii).
19. Item (vii) renumbered as item (iv) by C.O. 74
(23) EIGHTH SCHEDULE.
1[(24) NINTH SCHEDULE.
2[(a)] After entry 64, the following entries shall be added, namely: -
3[64A.] The Jammu and Kashmir State Kuth Act (No. I of Svt. 1978).
3[64B.] The Jammu and Kashmir Tenancy Act (No. II of Svt. 1980).
3[64C.] The Jammu and Kashmir Alienation of Land Act (No. V of Svt. 1995).
4* * * * *
5[64D.] The Jammu and Kashmir Big Landed Estates Abolition Act (No. XVII of Svt. 2007).
5[64E.] Order No. 6-H of 1951, dated the 10th March, 1951, regarding Resumption of Jagirs and other assignments of land revenue, etc.
6[64F. The Jammu and Kashmir Restitution of Mortgaged Properties Act, 1976 (Act XIV of 1976).
64G. The Jammu and Kashmir Debtors’ Relief Act, 1976 (Act XV of 1976).
7[(b) Entries 87 to 124, inserted by the Constitution (Thirty-ninth Amendment) Act, 1975, shall be renumbered as entries 65 to 102 respectively.]
8[(c) Entries 125 to 188 shall be renumbered as entries 103 to 166 respectively.]
1. Subs. by C.O. 74, for sub-paragraph 24.
2. Numbered by C.O. 105.
3. Renumbered by C.O. 98.
4. Omitted by C.O. 106.
5. Renumbered, by C.O. 106.
6. Ins. by C.O. 106.
7. Ins. by C.O. 105.
8. Ins. by C.O. 108(w.e.f. 31-12-1977)
1[(25) TENTH SCHEDULE.
(a) For the brackets, words and figures “[Articles 102(2) and 191(2)]”, the brackets, word and figures “[Article 102(2)]” shall be substituted;
(b) In clause (a) of paragraph 1, the words “or the Legislative Assembly or, as the case may be, either House of the Legislature of a State” shall be omitted;
(c) In paragraph 2, -
(i) In sub-paragraph (1), in sub-clause (ii) of clause (b) of the Explanation, the words and figures “or, as the case may be, article 188” shall be omitted;
(ii) In sub-paragraph (3), the words and figures “or, as the case may be, article 188” shall be omitted;
(iii) In sub-paragraph (4), the reference to the commencement of the Constitution (Fifty-second Amendment) Act, 1985 shall be construed as a reference to the commencement of the Constitution (Application to Jammu and Kashmir) Amendment Order, 1989;
(d) In paragraph 5, the words “or the Chairman or the Deputy Chairman of the Legislative Council of a State or the Speaker or the Deputy Speaker of the Legislative Assembly of a State” shall be omitted;
(e) In sub-paragraph (2) of paragraph 6, the words and figures “or, as the case may be, proceedings in the Legislature of a State within the meaning of article 212” shall be omitted;
(f) In sub-paragraph (3) of paragraph 8, the words and figures “or, as the case may be, article 194,” shall be omitted.]
1. Ins by C.O. 136.
Section 409. APPENDIX II
APPENDIX II
RE-STATEMENT, WITH REFERENCE TO THE PRESENT TEXT OF THE CONSTITUTION, OF THE EXCEPTIONS AND MODIFICATIONS SUBJECT TO WHICH THE CONSTITUTION APPLIES TO THE STATE OF JAMMU AND KASHMIR
Note. -
The exceptions and modifications subject to which the Constitution applies to the State of Jammu and Kashmir are either those provided in the Constitution (Application to Jammu and Kashmir) Order, 1954 or those consequential to the non-application to the State of Jammu and Kashmir of certain amendments to the Constitution. All the exceptions and modifications, which have a practical significance, are included in the re-statement, which is only for facility of quick reference. For ascertaining the exact position, reference will have to be made to the Constitution (Application to Jammu and Kashmir) Order, 1954 and to the text of the Constitution on the 20th June, 1964, as amended by the subsequent amendments to the Constitution mentioned in clause 2 of the said Order.]
(1) THE PREAMBLE.
(a) In the first paragraph, omit “SOCIALIST SECULAR”;
(b) In the penultimate paragraph, omit “and integrity”.
(2) PART I.
Article 3. -
(a) Add the following further proviso, namely: -
“Provided further that no Bill providing for increasing or diminishing the area of the State of Jammu and Kashmir or altering the name or boundary of that State shall be introduced in Parliament without the consent of the Legislature of that State.”;
(b) Omit Explanation I and Explanation II.
(3) PART II.
(a) This Part shall be deemed to have been applicable in relation to the State of Jammu and Kashmir as from the 26th day of January, 1950.
(b) Article 7. -
Add the following further proviso, namely: -
“Provided further that nothing in this article shall apply to a permanent resident of the State of Jammu and Kashmir who, after having so migrated to the territory now included in Pakistan, returns to the territory of that State under a permit for resettlement in that State or permanent return issued by or under the authority of any law made by the Legislature of that State, and every such person shall be deemed to be a citizen of India.”.
(4) PART III.
(a) Article 13.
References to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954 (C.O. 48), i.e., the 14th day of May, 1954.
(c) Article 16. -
In clause (3), reference to the State shall be construed as not including a reference to the State of Jammu and Kashmir.
(d) Article 19. -
(A) In clause (1), -
(i) In sub-clause (e), omit “and” at the end;
(ii) After sub-clause (e), insert the following clause, namely: -
“(f) To acquire, hold and dispose of property; and”;
(B) In clause (5), for “sub-clauses (d) and (e)”, substitute “sub-clauses (d), (e) and (f)”.
(e) Article 22. -
In clauses (4) and (7), for “Parliament”, substitute “the Legislature of the State”.
(f) Article 30. -
Omit clause (1A).
(g) After article 30, insert the following, namely: -
“Right to Property
31. Compulsory acquisition of property. -
(1) No person shall be deprived of his property save by authority of law.
(2) No property shall be compulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law; and no such law shall be called in question in any court on the ground that the amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash:
Provided that in making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1) of article 30, the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.
(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property.
(2B) Nothing in sub-clause (f) of clause (1) of article 19 shall affect any such law as is referred to in clause (2). (5) Nothing in clause 2 shall affect-
(a) The provisions of any existing law; or
(b) The provisions of any law which the State may hereafter make-
(i) For the purpose of imposing or levying any tax or penalty; or
(ii) For the promotion of public health or the prevention of danger to life or property; or
(iii) With respect to property declared by law to be evacuee property.”.
(h) After article 31, omit the following sub-heading, namely: -
“Saving of Certain Laws”
(i) Article 31A. -
(A) In clause (1), -
(i) For “article 14 or article 19″, substitute “article 14, article 19 or article 31″;
(ii) Omit the first proviso to clause (1);
(iii) In the second proviso omit “further”;
(B) In clause (2), for sub-clause (a), substitute the following sub-clause, namely: -
(a) “Estate” shall mean land, which is occupied or has been let for agricultural purposes or for purposes subservient to agriculture, or for pasture, and includes-
(i) Sites of buildings and other structures on such land;
(ii) trees standing on such land;
(iii) forest land and wooded waste;
(iv) area covered by or fields floating over water;
(v) sites of jandars and gharats;
(ii) Any jagir, inam, muafi or mukarrari or other similar grant,
But does not include-
(i) The site of any building in any town, or town area or village abadi or any land appurtenant to any such building or site;
(ii) Any land which is occupied as the site of a town or village; or
(iii) Any land reserved for building purposes in a municipality or notified area or cantonment or town area or any area for which a town planning scheme is sanctioned;’.
(j) Article 31C. -
This article is not applicable to the State of Jammu and Kashmir.
(k) Article 32. -
Omit clause (3).
(l) Article 35. -
(A) References to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954 (C.O. 48), i.e., the 14th day of May, 1954;
(B) In clause (a) (i), omit “clause (3) of article 16, clause (3) of article 32″;
(C) After clause (b), add the following clause, namely: -
“(c) No law with respect to preventive detention made by the Legislature of the State of Jammu and Kashmir, whether before or after the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, shall be void on the ground that it is inconsistent with any of the provisions of this Part, but any such law shall, to the extent of such inconsistency, cease to have effect on the expiration of twenty-five years from the commencement of the said Order, except as respects things done or omitted to be done before the expiration thereof.”.
(m) After article 35, add the following article, namely: -
“35A. Saving of laws with respect to permanent residents and their rights. -
Notwithstanding anything contained in this Constitution, no existing law in force in the State of Jammu and Kashmir, and no law hereafter enacted by the Legislature of the State, -
(a) Defining the classes of persons who are, or shall be, permanent residents of the State of Jammu and Kashmir; or
(b) Conferring on such permanent residents any special rights and privileges or imposing upon other persons any restrictions as respects-
(i) Employment under the State Government;
(ii) Acquisition of immovable property in the State;
(iii) Settlement in the State; or
(iv) Right to scholarships and such other forms of aid as the State Government may provide,
Shall be void on the ground that it is inconsistent with or takes away or abridges any rights conferred on the other citizens of India by any provision of this Part.”.
(5) PART IV. -
This part is not applicable to the State of Jammu and Kashmir.
(6) PART IVA. -
This part is not applicable to the State of Jammu and Kashmir.
(7) PART V.
(a) Article 55. -
(A) For the purposes of this article, the population of the State of Jammu and Kashmir shall be deemed to be sixty-three lakhs;
(B) In the Explanation omit the proviso.
(b) Article 81. -
For clauses (2) and (3), substitute the following clauses, namely: -
“(2) For the purposes of sub-clause (a) of clause (1), -
(a) There shall be allotted to the State six seats in the House of the People;
(b) The State shall be divided into single-member territorial constituencies by the Delimitation Commission constituted under the Delimitation Act, 1972, in accordance with such procedure as the Commission may deem fit;
(c) The constituencies shall, as far as practicable, be geographically compact areas, and in delimiting them regard shall be had to physical features, existing boundaries of administrative units, facilities of communication and public convenience; and
(d) The constituencies into which the State is divided shall not comprise the area under the occupation of Pakistan.
(3) Nothing in clause (2) shall affect the representation of the State in the House of the People until the dissolution of the House existing on the date of publication in the Gazette of India of the final order or orders of the Delimitation Commission relating to the delimitation of parliamentary constituencies under the Delimitation Act, 1972.
(4) (a) The Delimitation Commission shall associate with itself for the purpose of assisting it in its duties in respect of the State, five persons who shall be members of the House of the People representing the State.
(b) The persons to be so associated from the State shall be nominated by the Speaker of the House of the People having due regard to the composition of the House.
(c) The first nominations to be made under sub-clause (b) shall be made by the Speaker of the House of the People within two months from the commencement of the Constitution (Application to Jammu and Kashmir) Second Amendment Order, 1974.
(d) None of the associate members shall have a right to vote or to sign any decision of the Delimitation Commission.
(e) If owing to death or resignation, the office of an associate member falls vacant, it shall be filled as soon as may be practicable by the Speaker of the House of the People and in accordance with the provisions of sub-clauses (a) and (b).”.
(c) Article 82. -
Omit the second and third provisos.
(d) Article 105. -
In clause (3), for “shall be those of that House and of its members and committees immediately before the coming into force of section 15 of the Constitution (Forty-fourth Amendment) Act, 1978″ substitute “shall be those of the House of Commons of the Parliament of the United Kingdom, and of its members and committees, at the commencement of this Constitution”.
(e) For article 132, substitute the following article, namely: -
132. Appellate jurisdiction of Supreme Court in appeals from High Courts in certain cases. -
(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order of a High Court in the territory of India, whether in a civil, criminal or other proceeding, if the High Court certifies that the case involves a substantial question of law as to the interpretation of this Constitution.
(2) Where the High Court has refused to give such a certificate, the Supreme Court may, if it is satisfied that the case involves a substantial question of law as to the interpretation of this Constitution, grant special leave to appeal from such judgment, decree or final order.
(3) Where such a certificate is given, or such leave is granted, any party in the case may appeal to the Supreme Court on the ground that any such question as aforesaid has been wrongly decided and, with the leave of the Supreme Court, on any other ground.
Explanation. -
For the purposes of this article, the expression “final order” includes an order deciding an issue which, if decided in favour of the appellant, would be sufficient for the final disposal of the case.’.
(f) Article 133. -
(A) In clause (1), omit “under article 134A”;
(B) After clause (1), insert the following clause, namely: -
(1A) The provisions of section 3 of the Constitution (Thirtieth Amendment) Act, 1972, shall apply in relation to the State of Jammu and Kashmir subject to the modification that references therein to “this Act”, “the commencement of this Act”, “this Act had not been passed” and “as amended by this Act” shall be construed respectively as references to “the Constitution (Application to Jammu and Kashmir) Second Amendment Order, 1974″, “the commencement of the said Order”, “the said Order had not been made” and “as it stands after the commencement of the said Order”.’.
(g) Article 134. -
(A) In clause (1), in sub-clause (c), omit “under article 134A”;
(B) In clause (2), after “Parliament may” insert “on the request of the Legislature of the State”.
(h) Articles 134A, 135, 139 and 139A. -
These articles are not applicable to the State of Jammu and Kashmir.
(i) Article 145. -
In clause (1), omit sub-clause (cc).
(j) Article 150. -
For “as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe” substitute “as the Comptroller and Auditor-General of India may, with the approval of the President prescribe”.
(8) PART VI.
(a) Omit articles 153 to 217, article 219, article 221, articles 223, 224, 224A and 225, articles 227 to 233, article 233A and articles 234 to 237.
(b) Article 220. -
References to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Amendment Order, 1960, i.e., the 26th January, 1960.
(c) Article 222. -
After clause (1), insert the following clause, namely: -
“(1A) Every such transfer from the High Court of Jammu and Kashmir or to that High Court shall be made after consultation with the Governor.”.
(d) Article 226. -
(A) Renumber clause (2) as clause (1A);
(B) Omit clause (3);
(C) Renumber clause (4) as clause (2); and in clause (2) as so renumbered, for “this article” substitute “clause (1) or clause (1A)”.
(9) PART VIII. -
This part is not applicable to the State of Jammu and Kashmir.
(10) PART X. -
This part is not applicable to the State of Jammu and Kashmir.
(11) PART XI.
(a) Article 246. -
(A) In clause (1), for “clauses (2) and (3)” substitute “clause (2)”;
(B) In clause (2), omit “Notwithstanding anything in clause (3),”;
(C) Omit clauses (3) and (4).
(b) For article 248, substitute the following article, namely: -
248. Residuary powers of legislation. -
Parliament has exclusive power to make any law with respect to-
(a) Prevention of activities involving terrorist acts directed towards overawing the Government as by law established or striking terror in the people or any section of the people or alienating any section of the people or adversely affecting the harmony amongst different sections of the people;
(aa) Prevention of other activities directed towards disclaiming, questioning or disrupting the sovereignty and territorial integrity of India or bringing about cession of a part of the territory of India or secession of a part of the territory of India from the Union or causing insult to the Indian National Flag, the Indian National Anthem and this Constitution; and
(b) Taxes on-
(i) Foreign travel by sea or air;
(ii) Inland air travel;
(iii) Postal articles, including money orders, phonograms and telegrams.
Explanation. -
In this article, “terrorist act” means any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or firearms or other lethal weapons or poisons or noxious gases or other chemicals or any other substances (whether biological or otherwise) of a hazardous nature.’.
(bb) Article 249, in clause (1), for “any matter enumerated in the State List specified in the resolution”, substitute “any matter specified in the resolution, being a matter which is not enumerated in the Union List or in the Concurrent List”.
(c) Article 250. -
For “to any of the matters enumerated in the State List” substitute “also to matters not enumerated in the Union List”.
(d) Omit clause (d).
(e) Article 253. -
Add the following proviso, namely: -
“Provided that after the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, no decision affecting the disposition of the State of Jammu and Kashmir shall be made by the Government of India without the consent of the Government of that State.”.
(f) Omit article 255.
(g) Article 256.
Renumber this article as clause (1) thereof, and add the following new clause thereto, namely: -
“(2) The State of Jammu and Kashmir shall so exercise its executive power as to facilitate the discharge by the Union of its duties and responsibilities under the Constitution in relation to that State; and in particular, the said State shall, if so required by the Union, acquire or requisition property on behalf and at the expense of the Union, or if the property belongs to the State, transfer it to the Union on such terms as may be agreed, or in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India.”
(h) Article 261. -
In clause (2), omit “made by Parliament”.
(12) PART XII.
(a) Articles 266, 282, 284, 298, 299 and 300. -
In these articles references to the State or States shall be construed as not including references to the State of Jammu and Kashmir;
(b) Omit clause (2) of article 267, article 273, clause (2) of article 283 and article 290;
(c) Articles 277 and 295. -
In these articles references to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, i.e., the 14th day of May, 1954.
(d) Omit the sub-heading “Chapter IV. -
Right to Property” and article 300A.
(13) PART XIII.
In article 303, in clause (1), omit “by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule”.
(14) PART XIV.
Except in article 312, reference to “State” in this Part does not include the State of Jammu and Kashmir.
(15) PART XIVA.
This Part is not applicable to the State of Jammu and Kashmir.
(16) PART XV.
(a) Article 324. -
In clause (1), the reference to the Constitution shall, in relation to elections to either House of the Legislature of Jammu and Kashmir, be construed as a reference to the Constitution of Jammu and Kashmir.
(b) Articles 325, 326 and 327. -
In these articles the references to a State shall be construed as not including a reference to the State of Jammu and Kashmir.
(c) Omit article 328.
(d) Article 329. -
(A) Reference to a State shall be construed as not including a reference to the State of Jammu and Kashmir;
(B) Omit “or article 328″.
(17) PART XVI. -
Original clause (a) omitted and clauses (b) and (c) relettered as clauses (a) and (b).
(a) Omit articles 331, 332, 333, 336 and 337.
(b) Articles 334 and 335. -
References to the State or the States shall be construed as not including references to the State of Jammu and Kashmir.
(c) Article 339, in clause (1), omit “the administration of the Scheduled Areas and”.
(18) PART XVII. -
The provisions of this Part shall apply to the State of Jammu and Kashmir only in so far as they relate to-
(i) The official language of the Union;
(ii) The official language for communication between one State and another, or between a State and the Union; and
(iii) The language of the proceedings in the Supreme Court.
(19) PART XVIII. -
(a) For article 352, substitute the following article, namely: -
“352. Proclamation of Emergency. -
(1) If the President is satisfied that a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance, he may, by Proclamation, make a declaration to that effect.
(2) A Proclamation issued under clause (1)-
(a) May be revoked by a subsequent Proclamation;
(b) Shall be laid before each House of Parliament;
(c) Shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub-clause (c), and if a resolution approving the Proclamation has been passed by the Council of States but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
(3) A Proclamation of Emergency declaring that the security of India or of any part of the territory thereof is thereatened by war or by external aggression or by internal disturbance may be made before the actual occurrence of war or of any such aggression or disturbance if the President is satisfied that there is imminent danger thereof.
(4) The power conferred on the President by this article shall include the power to issue different Proclamations on different grounds, being war or external aggression or internal disturbance or imminent danger of war or external aggression or internal disturbance, whether or not there is a Proclamation already issued by the President under clause (1) and such Proclamation is in operation.
(5) Notwithstanding anything in the Constitution, -
(a) The satisfaction of the President mentioned in clause (1) and clause (3) shall be final and conclusive and shall not be questioned in any court on any ground;
(b) Subject to the provisions of clause (2), neither the Supreme Court nor any other Court shall have jurisdiction to entertain any question, on any ground, regarding the validity of-
(i) A declaration made by Proclamation by the President to the effect stated in clause (1); or
(ii) The continued operation of such Proclamation.
(6) No Proclamation of Emergency made on grounds only of internal disturbance or imminent danger thereof shall have effect in relation to the State of Jammu and Kashmir (except as respects article 354) unless-
(a) It is made at the request or with the concurrence of the Government of that State; or
(b) Where it has not been so made, it is applied subsequently by the President to that State at the request or with the concurrence of the Government of that State.”.
(b) Article 353. -
Omit the proviso.
(c) Article 356. -
(A) In clause (1), reference to provisions or provision of this Constitution shall, in relation to the State of Jammu and Kashmir, be construed as including references to provisions or provision of the Constitution of Jammu and Kashmir;
(B) In clause (4), -
(i) For the opening portion, substitute the following, namely: -
“A Proclamation so approved shall, unless revoked, cease to operate on the expiration of a period of six months from the date of the passing of the second of the resolutions approving the Proclamation under clause (3)”;
(ii) After the second proviso, the following proviso shall be inserted, namely: -
Provided also that in the case of the Proclamation issued under clause (1) on the 18th day of July, 1990 with respect to the State of Jammu and Kashmir, the reference in the first proviso to this clause to “three years” shall be construed as a reference to “seven years”.’.
(C) For clause (5), substitute the following clause, namely: -
“(5) Notwithstanding anything in this Constitution, the satisfaction of the President mentioned in clause (1) shall be final and conclusive and shall not be questioned in any court on any ground.”.
(d) Article 357. -
For clause (2), substitute the following clause, namely: -
“(2) Any law made in exercise of the power of the Legislature of the State by Parliament or the President or other authority referred to in sub-clause (a) of clause (1) which Parliament or the President or such other authority would not, but for the issue of a Proclamation under article 356, have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of one year after the Proclamation has ceased to operate except as respects things done or omitted to be done before the expiration of the said period, unless the provisions which shall so cease to have effect are sooner repealed or re-enacted with or without modification by Act of the appropriate Legislature.”.
(e) For article 358, substitute the following article, namely: -
“358. Suspension of provisions of article 19 during emergencies. -
While a Proclamation of Emergency is in operation, nothing in article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect.”.
(f) Article 359. -
(A) In clause (1) omit “(except articles 20 and 21)”;
(B) In clause (1A), -
(i) Omit “(except articles 20 and 21)”;
(ii) Omit the proviso;
(C) Omit clause (1B);
(D) In clause (2), omit the proviso.
(g) Omit article 360.
(20) PART XIX.
(a) Article 361A. -
This article is not applicable to the State of Jammu and Kashmir.
(b) Omit article 365.
(c) Article 367. -
After clause (3), add the following clause, namely: -
“(4) For the purposes of this Constitution as it applies in relation to the State of Jammu and Kashmir-
(a) References to this Constitution or to the provisions thereof shall be construed as references to the Constitution or the provisions thereof as applied in relation to the said State;
(aa) References to the person for the time being recognised by the President on the recommendation of the Legislative Assembly of the State as the Sadar-i-Riyasat of Jammu and Kashmir, acting on the advice of the Council of Ministers of the State for the time being in office, shall be construed as references to the Governor of Jammu and Kashmir;
(b) References to the Government of the said State shall be construed as including references to the Governor of Jammu and Kashmir acting on the advice of his Council of Ministers:
Provided that in respect of any period prior to the 10th day of April, 1965, such references shall be construed as including references to the Sadar-i-Riyasat acting on the advice of his Council of Ministers;
(c) References to a High Court shall include references to the High Court of Jammu and Kashmir;
(d) References to the permanent residents of the said State shall be construed as meaning persons who, before the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, were recognised as State subjects under the laws in force in the State or who are recognised by any law made by the Legislature of the State as permanent residents of the State; and
(e) References to a Governor shall include references to the Governor of Jammu and Kashmir:
Provided that in respect of any period prior to the 10th day of April, 1965, such references shall be construed as references to the person recognised by the President as the Sadar-i-Riyasat of Jammu and Kashmir and as including references to any person recognised by the President as being competent to exercise the powers of the Sadar-i-Riyasat.”.
(21) PART XX.
Article 368. -
(a) In clause (2), add the following further proviso, namely: -
“Provided further that no such amendment shall have effect in relation to the State of Jammu and Kashmir unless applied by order of the President under clause (1) of article 370.”;
(b) Omit clauses (4) and (5) and after clause (3) add the following clause, namely: -
“(4) No law made by the Legislature of the State of Jammu and Kashmir seeking to make any change in or in the effect of any provision of the Constitution of Jammu and Kashmir relating to: -
(a) Appointment, powers, functions, duties, emoluments, allowances, privileges or immunities of the Governor; or
(b) Superintendence, direction and control of elections by the Election Commission of India, eligibility for inclusion in the electoral rolls without discrimination, adult suffrage and composition of the Legislative Council, being matters specified in sections 138, 139, 140 and 50 of the Constitution of Jammu and Kashmir,
Shall have any effect unless such law has, after having been reserved for the consideration of the President, received his assent.”.
(22) PART XXI. -
(a) Omit articles 369, 371, 371A, 372A, 373 and articles 376 to 378A and 392.
(b) Article 372. -
(A) Omit clauses (2) and (3);
(B) References to the laws in force in the territory of India shall include references to hidayats, ailans, ishtihars, circulars, robkars, irshads, yadashts, State Council Resolutions, Resolutions of the Constituent Assembly, and other instruments having the force of law in the territory of the State of Jammu and Kashmir;
(C) References to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954 (C.O. 48), i.e., the 14th day of May, 1954.
(c) Article 374. -
(A) Omit clauses (1), (2), (3) and (5);
(B) In clause (4), the reference to the authority functioning as the Privy Council of a State shall be construed as a reference to the Advisory Board constituted under the Jammu and Kashmir Constitution Act, Svt. 1996, and references to the commencement of the Constitution shall be construed as references to the commencement of the Constitution (Application to Jammu and Kashmir) Order, 1954, i.e., the 14th day of May, 1954.
(23) PART XXII. -
Omit articles 394 and 395.
(24) THIRD SCHEDULE. -
Omit forms V, VI, VII and VIII.
(25) FIFTH SCHEDULE. -
This Schedule is not applicable to the State of Jammu and Kashmir.
(26) SIXTH SCHEDULE. -
This Schedule is not applicable to the State of Jammu and Kashmir.
(27) SEVENTH SCHEDULE. -
(a) List I- Union List. -
(A) Omit entry 2A;
(B) For entry 3, substitute the following entry, namely: -
“3. Administration of cantonments.”;
(C) Omit entries 8, 9, 34 and 79;
(D) In entry 72, the reference to the States shall be construed, -
(i) In relation to appeals to the Supreme Court from any decision or order of the High Court of the State of Jammu and Kashmir made in an election petition whereby an election to either House of the Legislature of that State has been called in question, as including a reference to the State of Jammu and Kashmir;
(ii) In relation to other matters, as not including a reference to that State;
(E) In entry 81, omit “Inter-State migration”;
(F) For entry 97, substitute the following entry, namely: -
97. Prevention of activities-
(a) Involving terrorist acts directed towards overawing the Government as by law established or striking terror in the people or any section of the people or alienating any section of the people or adversely affecting the harmony amongst different sections of the people;
(b) Directed towards disclaiming, questioning or disrupting the sovereignty and territorial integrity of India or bringing about cession of a part of the territory of India or secession of a part of the territory of India from the Union or causing insult to the Indian National Flag, the Indian National Anthem and this Constitution;
Taxes on foreign travel by sea or air, on inland air travel and on postal articles, including money orders, phonograms and telegrams.
Explanation. -
In this entry, “terrorist act” has the same meaning as in the Explanation to article 248.’.
(b) Omit List II- State List.
(c) List III- Concurrent List.
(A) For entry 1, substitute the following entry, namely: -
“1. Criminal law (excluding offences against laws with respect to any of the matters specified in List I and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power) in so far as such criminal law relates to offences against laws with respect to any of the matters specified in this List.”;
(B) For entry 2, substitute the following entry, namely: -
“2. Criminal procedure (including prevention of offences and constitution and organisation of criminal courts, except the Supreme Court and the High Court) in so far as it relates to, -
(i) Offences against laws with respect to any matters being matters with respect to which Parliament has power to make laws; and
(ii) Administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country.”;
(C) Omit entry 3, entries 5 to 10 (both inclusive), entries 14, 15, 17, 20, 21, 27, 28, 29, 31, 32, 37, 38, 41 and 44
(D) Entries 11A, 17A, 17B, 20A and 33A are not applicable to the State of Jammu and Kashmir;
(E) For entry 12, substitute the following entry, namely: -
“12. Evidence and oaths in so far as they relate to, -
(i) Administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country; and
(ii) Any other matter being matters with respect to which Parliament has power to make laws.”;
(F) For entry 13, substitute the following entry, namely: -
“13. Civil procedure in so far as it relates to administration of oaths and taking of affidavits by diplomatic and consular officers in any foreign country.”;
(G) For entry 25, substitute the following entry, namely: -
“25. Vocational and technical training of labour.”;
(H) For entry 30, substitute the following entry, namely: -
“30. Vital statistics in so far as they relate to births and deaths including registration of births and deaths.”;
(I) For entry 42, substitute the following entry, namely: -
“42. Acquisition and requisitioning of property, so far as regards acquisition of any property covered by entry 67 of List I or entry 40 of List III or of any human work of art which has artistic or aesthetic value.”;
(J) In entry 45, for “List II or List III” substitute “this List”.
(28) NINTH SCHEDULE. -
(a) After entry 64, add the following entries, namely: -
“64A. The Jammu and Kashmir State Kuth Act (No. I of Svt. 1978).
64B. The Jammu and Kashmir Tenancy Act (No. II of Svt. 1980).
64C. The Jammu and Kashmir Alienation of Land Act (No. V of Svt. 1995).
64D. The Jammu and Kashmir Big Landed Estates Abolition Act (No. XVII of Svt. 2007).
64E. Order No. 6-H of 1951, dated the 10th March, 1951, regarding Resumption of Jagirs and other assignments of land revenue, etc.
64F. The Jammu and Kashmir Restitution of Mortgaged Properties Act, 1976 (Act XIV of 1976).
64G. The Jammu and Kashmir Debtors’ Relief Act, 1976 (Act XV of 1976).”;
(b) Entries 65 to 86 are not applicable to the State of Jammu and Kashmir;
(c) After entry 86, insert the following entry, namely: -
“87. The Representation of the People Act, 1951 (Central Act 43 of 1951), the Representation of the People (Amendment) Act, 1974 (Central Act 58 of 1974) and the Election Laws (Amendment) Act, 1975 (Central Act 40 of 1975).”;
(d) After entry 91, insert the following entry, namely: -
“92. The Maintenance of Internal Security Act, 1971 (Central Act 26 of 1971).”;
(e) After entry 129, insert the following entry, namely: -
“130. The Prevention of Publication of Objectionable Matter Act, 1976 (Central Act 27 of 1976).”;
(f) After insertion of the entries 87, 92 and 130 as indicated above, renumber entries 87 to 188 as entries 65 to 166 respectively.
(29) TENTH SCHEDULE. -
(a) For the brackets, words and figures “[Articles 102(2) and 191(2)]”, the brackets, word and figures “[Article 102(2)]” shall be substituted;
(b) In clause (a) of paragraph 1, the words “or the Legislative Assembly or, as the case may be, either House of the Legislature of a State” shall be omitted;
(c) In paragraph 2, -
(i) In sub-paragraph (1), in sub-clause (ii) of clause (b) of the Explanation, the words and figures “or, as the case may be, article 188″ shall be omitted;
(ii) In sub-paragraph (3), the words and figures “or, as the case may be, article 188″ shall be omitted;
(iii) In sub-paragraph (4), the reference to the commencement of the Constitution (Fifty-second Amendment) Act, 1985 shall be construed as a reference to the commencement of the Constitution (Application to Jammu and Kashmir) Amendment Order, 1989;
(d) In paragraph 5, the words “or the Chairman or the Deputy Chairman of the Legislative Council of a State or the Speaker or the Deputy Speaker of the Legislative Assembly of a State” shall be omitted;
(e) In sub-paragraph (2) of paragraph 6, the words and figures “or, as the case may be, proceedings in the Legislature of a State within the meaning of article 212″ shall be omitted;
(f) In sub-paragraph (3) of paragraph 8, the words and figures “or, as the case may be, article 194,” shall be omitted.
Section 410. APPENDIX III
APPENDIX III
EXTRACTS FROM THE CONSTITUTION (FORTY-FOURTH AMENDMENT) ACT, 1978
1. Short title and Commencement. -
It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act.
3. Amendment of article 22. In article 22 of the Constitution, -
(a) For clause (4), the following clause shall be substituted, namely : -
(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than two months unless an Advisory Board constituted in accordance with the recommendations of the Chief Justice of the appropriate High Court has reported before the expiration of the said period of two months that there is In its opinion sufficient cause for such detention:
Provided that an Advisory Board shtil consist of at Chairman and not less than two other members and the Chairman shall be a serving Judge of the appropriate High Court and the other members shall be serving or retired Judges of any High Court:
Provided further that nothing in this clause shall authorise the detention of any person beyond the maximum period prescribed by any law made bv Parliament under sub-clause (a) of clause (7).
Explanation. -
- In this clause, “appropriate High Court “means, -
(i) In the case of the detention of a person in pursuance of an order of detention made by the Government of India or an officer or authority subordinate to that Government, the High Court for the Union territory of Delhi;
(ii) In the case of the detention of a person in pursuance of an order of detention made by the Government of any State (other than a Union territory), the High Court for that State’, and
(iii) In the case of the detention of a person in pursuance of an order of detention made by the administrator of a Union territory or an officer or authority subordinate to such administrator, such High Court as may be specified by or under any law made by Parliament in this behalf.’;
(b) In clause (7), -
(i) Sub-clause (a) shall be omitted;
(ii) Sub-clause (b) shall be re-lettered as sub-clause (a); and
(iii) Sub-clause (c) shall be re-lettered as sub-clause (b) and in a sub-clause as so re-lettered, for the words, brackets, letter and figure “sub-clause (a) of clause (4)”, the word, brackets and figure “clause (4)” shall be substituted.
