(1) The Central Government may make rules for the purposes of carrying into effect the provisions of this Ordinance.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for—
(a) the authority for granting permission under the proviso to sub-clause (Hi) of clause (1) of section 2;
(b) the preparation of registers, records and other documents and the form and manner in which such registers, records and documents may be maintained, under section 26;
(c) the powers which may be exercised by an Inspector under sub-section (2) of section 27;
46 of 1948.
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 183 14 of 1947.
(d) any other matter which is to be, or may be prescribed.
39. Save as otherwise expressly provided, the provisions of this Ordinance shall be in addition to and not in derogation of the Industrial Disputes Act, 1947, or any corresponding law relating to investigation and settlement 01 industrial disputes in force in a State.
Application of certain laws not barred.
THE FIRST SCHEDULE [See section 4 (a)] COMPUTATION OF GROSS PROFITS Accounting Year ending Item No.
* i .
2 .
3- Particulars Amount of sub-items Rs.
Net Profit as shown in the Profit and Loss Account after making usual and necessary provisions.
Add back provision for :
(a) Bonus.
(b) Depreciation.
(c) Development Rebate Reserve.
(d) Any other reserves.
Total of Item No. 2 Rs.
Add back also :
(a) Bonus paid in respect of previous accounting years.
(6) Donations in excess of the amount admissible for income-tax.
Amount of Remarks main Items Rs, See foot-note (1) See foot-note (1) See foot-note (1) *Where the profit subject to taxation is shown in the Profit and Loss Account and the provision made for taxes on income is shown, the actual provision for taxes on income shall be deducted from the profit.
184 THE GAZETTE OF INDIA EXTRAORDINARY [PART II jo Ofi94« Item No.
A- Particulars
(c) Capital expenditure (other than capital expenditure on scientific research which is allowed as a deduction under any law for the time being in force relating to direct taxes) and capital losses (other than losses on sale of capital assets on which depreciation has been allowed for income-tax).
id) Any amount certified by the Reserve Bank of India in terms of sub-section {2) of section 34A of the Banking Companies Act, 1949-
(e) Losses of, or expenditure relating to, any business situated outside India.
Amount of sub-items Rs.
Total of Item No. 3 Rs.
Add also Income, plants or gains (if any) credited directly to published/or disclosed reserves, other than— (») capital receipts^and capital profits (including profits} on the sale of capital Amount of main Items Rs.
Remarks See foot-note (1) SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 185 Itcn No.
5-
6.
1 Particulars assets on which depreciation has not been allowed for income-tax) ;
(it) profits of, and receipts relating to, any business situated outside India ;
(tit) income of foreign banking companies from investments outside India.
Net total of Item No. 4 :
Total of Item Nos. 1, 2, 3 and 4.
Deduct :
(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allowed for income-tax).
(b) Profits of, and receipts relating to, any business situated outside India.
(c) Income of foreign banking companies from investments outside India.
(d) Expenditure or losses (if any) debited directly to published or disclosed reserves, other than—
(i) capital expenditure and capital losses (other Amount of sub-items Rs.
Rs.
Amount of main Items Rs.
Rs.
Remarks See foot-note (2) See foot-note (2) See foot-note (2) 186 THE GAZETTE OF INDIA EXTRAORDINARY [PART II Item No.
7- Particulars Amount of sub-items than losses on sale of capital assets on which depreciation has not been allowed for income-tax) ;
(»;") losses of any business situated outside India.
(e) In the case of foreign banking companies proportionate administrative (overhead) expenses of Head Office allocable to Indian business.
(J) Refund of any excess direct tax paid for previous accounting years and excess provision, if any, of previous accounting yearsj relating to bonus, depreciation, or development rebate, if written back.
(g) Subsidy, if any, received from Government or from any body corporate established by any law for the time being in force.
Total of Item No. 6 Gross Profits for purposes of bonus (Item No. 5 minus Item No. 6).
Rs.
Rs.
Amount of main Items Rs.
Rs.
Remarks See foot-note (3) See foot-note (2) See foot-note (2) Foot-notes—
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
(3) In the proportion of Indian Gross Profit (Item No. 7) to Total World Gross Profit (a3 per consolidated Profit and Loss Account, adjusted as in Item No. 2 above only).
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINAEY 187 THE SECOND SCHEDULE [See section 4 (6)] COMPUTATION OF GROSS PROFITS Accounting Year ending Item No.
1
2.
3- J Particulars Net Profit as per Profit and Loss Account.
Add back provision for :
(a) Bonus.
(Jb) Depreciation.
(c) Direct taxes, including the provision (if any) for previous accounting years;
(d) Development rebate/ Development allowance reserve.
(e) Any other reserves.
Total of Item No. 2 I Add back also :
(a) Bonus paid in respect of previous accounting years.
(fc) Donations in excess of the amount admissiblefor income-tax.
(c) Any annuity due, or commuted value of any annuity paid, under the provisions of section 280D of the Income-tax Act during the accounting year.
Amount of sub-items Rs.
Is.
Amount of main Items Rs.
Remarks See foot-note (1) See foot-note (1) See foot-note (1) 188 THE GAZETTE OF INDIA EXTRAORDINARY [PART II Item No.
4- Particulars (dyCapital expenditure (other fthan capital expenditure on scientific research which is allowed as'a deduction under any law for the time being in force relating to direct taxes) and capita] losses (other than losses on sale"of capital assets 'on which depreciation has been allowed for income-tax or agricultural income-tax).
(e) Losses of, or expenditure relating to, any business situated outside India.
Totalof Item No. 3 ] Add also Income, profits or gains (if any) credited directly to reserves, other than—
(t) capital receipts and capital profits (including profits on the sale of capital assets on which depreciation has not been allowed for income-tax or agricultural incometax);
(«) profits of, and receipts relating to, any business situated outside India;
Amount of sub-items Rs.
*s.
Amount of main Items Rs.
Remarks See foot-note (i) SEC. 1] THE GAZETTE OF INDIA EX-TRAORtHNARY 189 Item [No.
5-
6.
Particulars A (HI) income of foreign concerns from investments outside India.
Net total of Item No. 4 Total of Item Nos. 1, 2, 3 and 4.
Deduct :
(a) Capital receipts and capital profits (other than profits on the sale of assets on which depreciation has been allowed for income-tax or agricultural income-tax).
(b) Profits of, and receipts relating to, any business situated outside India.
(c) Income of foreign concerns from investments outside India.
(d) Expenditure or losses (if any) debited directly to reserves, other than—
(z) capital expenditure and capital losses (other than losses on sale of capital assets on which depreciation has not been allowed for mount of sub-items Rs.
Rs.
i Amount of main Items Rs.
Rs.
Remarks See foot-note (2) See foot-note (2) See foot-note (2) j 9o THE GAZETTE OF INDIA EXTRAORDINARY [PAHT II Item No.
7- ( Particulars income-tax or agricultural income-tax) ;
(it) losses of any business situated outside India.
(e) ~_Jn the case of foreign "concerns proportionate administrative (overhead) expenses of Head Office allocable to Indian business.
(/) Refund of any direct tax paid for previous accounting years and excess provision, if any, of previous accounting years relating to bonus, depreciation, taxation or development rebate or development allowance, if written back.
(g) Subsidy, if any, received from Government or from any body corporate established by any law for the time being in force.
Total of Item No. 6 .
Gross Profits^for purposes of bonus (Item No. 5 minus Item No. 6).
Amount of sub-items Rs.
Rs.
Amount of main Items Rs.
Rs.
Remarks See foot-note (3) See foot-note (2) Foot-notes—
(1) If, and to the extent, charged to Profit and Loss Account.
(2) If, and to the extent, credited to Profit and Loss Account.
(3) In the proportion of Indian Gross Profit (Item No. 7) to Total World Groa Profit (as per consolidated Profit and Loss Account, adjusted as in Item No.
above only).
Site, ij THE GAZETTE 6F INDIA EXTRAO±lt>INARV tot Item No.
(I] i .
2 .
THE THIRD SCHEDULE [See section 6 (d)~\ Category of employer 1 (2) Company, other than a banking company.
Banking company Further sums to be deducted
(3)
(i) The dividends payable on its preference share capital for the accounting year calculated at the actual rate at which such dividends are payable ;
(tt) 8-5 per cent, of its paid up equity share capital as at the commencement of the accounting year;
(fit1) 6 per cent, of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year :
Provided that where the employer is a foreign company within the meaning of section 591 of the Companies Act, 1956, the total amount to be 3 deducted under this Item shall be 8-5 per cent, on the aggregate of the value of the net fixed assets and the current assets of the company in India after deducting the amount of its current liabilities (other than any amount shown as payable by the company to its Head Office whether towards any advance made by the Head Office or otherwise or any interest paid by the company to its Head Office) in India.
(i) The dividends payable on its preference share capital for the accounting year calculated at the rate at which such dividends are payable ;
(it) 7-5 per cent, of its paid up equity share capital as at the commencement of the accounting year ;
1 of 1956.
igi THE GAZETTE OF INDIA EXTRAORDINARY [ i W tt 10 of 1949, 1 of 1-J56.
Item No.
(1) Category of employer
(2) Further sums to be deducted
(3)
(in) 5 per cent, of its reserves shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year ;
(iv) any sum which, in respect of the accounting year, is transferred by it—
(a) to a reserve fund under subsection (/) of section 17 of the Banking Companies Act, 1949 ; or
(b) to any reserves in India in pursuance of any direction or advice given by the Reserve Bank of India, whichever is higher :
Provided that where the banking company is a foreign company within the meaning of section 591 of the Companies Act, 1956, the amount to be deducted under this Item shall be the aggregate of— (»') the dividends payable to its preference shareholders for the accounting year at the rate at which such dividends are payable on such amount as bears the same proportion to its total preference share capital as its total working funds in India bear to its total world working funds ;
(ii) 7 • 5 per cent, on such amount as bears the same proportion to its total paid up equity share capital as its total working funds in India bear to its total world working funds ;
(tit) 5 per cent, on such amount a bears the same proportion to its total disclosed reserves as its total working funds in India bear to its total world working funds;
SEC. 1] THE GAZETTE OP INDIA EXTRAORDINARY 193 Item No.
M 3- 4- 5- Category of employer
(2) Corporation Co-opei alive society Any other employer not falling under any of the^aforesaid categories.
Further sums to'̂ be deducted
(3)
(iv) any sum which, in respect of the accounting year, is deposited by it with the Reserve Bank of India under sub-clause (M) of clause (b) of sub-section (2) of section 11 of the Banking Companies Act, 1949, not exceeding the amount required under the aforesaid provision to be so deposited.
(i) 8-5 per cent, of its paid up capital as at the commencement of the accounting year ;
(ii) 6 per cent, of its reserves, if any, shown in its balance-sheet as at the commencement of the accounting year, including any profits carried forward from the previous accounting year.
CO 8 • 5 per cent, of the capital invested by such society in its establishment as evidenced from its books of accounts at the commencement of the accounting year ;
(ii) such sum as has been carried forward in respect of the accounting year to a reserve fund under any law relating to co-operative societies for the time being in force.
8-5 per cent, of the capital invested by him in his establishment as evidenced from his books of accounts at the commencement of the accounting year :
Provided that where such employer is a person to whom Chapter XXIIA of the Income-tax Act applies, the annuity deposit payable by him under the provisions of that Chapter during the accounting year shall also be deducted :
ic of 1949.
IQ4 THE GAZETTE OF INDIA EXTRAORDINARY [PART II Item No.
( i ) Category of employer
(2) Further sums to be deducted
(3)
Provided further that where such employer is a firm, an amount equal to 25 per cent, of the gross profits derived by it from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of clause (a) of section 6 by way of remuneration to all the partners taking part in the conduct of business of the establishment shall also be deducted, but where the partnership agreement, whether oral or written, provides for the payment of remuneration to any such partner, and—
(i) the total remuneration payable to all such partners is less than the said 25 per cent., the amount payable, subject to a maximum of forty-eight thousand rupees to each such partner ; or
(ii) the total remuneration payable to all such partners is higher than the said 25 per cent., such percentage, or a sum calculated at the rate of forty-eight thousand rupees to each such partner, whichever is less, shall be deducted under this proviso :
Provided also that where such employer is an individual or a Hindu undivided family,— (t')Jan amount equal to 25 per cent, of the gross profits derived by such employer from the establishment in respect of the accounting year after deducting depreciation in accordance with the provisions of clause (a) of section 6^i or («)J?forty-elght thousand rupees, whichever is less, by way of remuneration to such employer, shall also be deducted.
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 195 Item No. Category of employer
(i) W
6. Any employer falling within Item No. 1 or Item No. 3 or Item No. 4 or Item No. 5 being a licensee within the meaning of the Electricity Supply Act, 1948.
Further sums to be deducted
(3) In addition to the sums deductible under any of the aforesaid Items, such sums as are required to be appropriated by the licensee in respect of the accounting year to a reserve under the Sixth Schedule to that Act shall also be deducted. f4 of 1948
Explanation.—The expression "reserves" occurring in column (2) against Item Nos. l(tii), 2(iii) and 3(ii) shall not include any amount set apart for the purpose of—
(i) payment of any direct tax which, according to the balance-sheet, would be payable;
(ii) meeting any depreciation admissible in accordance with the provisions of clause (a) of section 6;
(iii) payment of dividends which have been declared, but shall include—•
(a) any amount, over and above the amount referred to in clause (i) of this Explanation, set apart as specific reserve for the purpose of payment of any direct tax; and
(b) any amount set apart for meeting any depreciation in excess oi the amount admissible in accordance with the provisions of clause (a) of section 6.
THE FOURTH SCHEDULE (See section 15) In this Schedule, the total amount of bonus equal to four per cent, of the annual salary or wage payable to all the employees is assumed to be Rs. 50,000, Accordingly, the maximum bonus to which all the employees are entitled to be paid (twenty per cent, of the annual salary or wage of all the employees) would be Rs. 2,50,000.
Year ( i )
1.
2 .
Amount equal to sixty per cent, or sixtyseven per cent., as the case may be, of available surplus allocable as bonus
(2) Rs.
70,000 6,35,000 Amount payable as bonus
(3) Rs.
70,000 2,50,000* Set on or set off of the year carried forward
(4) Rs.
Nil Set on 2,50,000* Total set on or set off carried forward
(5) Rs. of (year) Nil Set on 2,50,000 (2) 196 THE GAZETTE OF INDIA EXTRAORDINARY [PART II Year (0 3- 4- 5- 6 7-
8.
9- 1 0 .
Amount equal to sixty per cent, or sixtyseven per cent, as the case may be, of available surplus allocable as bonus
(2) Rs.
2,20,000 3,75^ooo 1,40,000 3,10,000 1,00,000 Nil (due to loss) 10,000 2,15,000 Amount payable as bonus >
(3) Rs.
2,50,000* (inclusive of 30,000 from year-:
2,50,000 2,50,000* (inclusive of I,io,o( from year-2) 2,50,000* 2,50,000* (inclusive of 1,25,000 from yet and 25,000 from year-6) 50,000** (inclusive of 35,000 from year-6) 50,000** 1,60,000 (after setting off 15,000 from year-8 and 40,000 from year-9) Set on or set off of the year carried forward
(4) Rs.
Nil 2) Set on 1,25,000 Nil DO Set on 60,000 Nit ir-4 Set off 15,000 Set off 40,000 Nil Total set on or set off carried forward
(5) Rs. of (year) Set on 12,20,000 (2) Set on 2,20,000 (2) f 1,25,000 (4) Set on 1,10,000 (2) 1,25,000 (4) Set on Nilf (2) 1,25,000 (4} 60,000 (6) Set on (6) 35,000 Set off 15,000 (8) Set off 15,000 (S) 40,000 (9) Nil NOTES— *Maximum.
fThe balance of Rs. 1,10,000 set on from year-2 lapses.
**Minimum.
S. FADHAKRISHNAN, President.
R. C. S. SARKAR, Secy, to the Govt. of India.
SEC. 1] tHE GAZETTE OF INDIA EXTRAORDINARY i j# CORRIGENDUM In the Gazette of India Extraordinary, Part II—Sec. 1 bearing No- 15 dated 24th May, 1965 under Ministry of Law the undernoted amendments may be made: — On page 161, in eighth line for "MENT) BILL, 1965" read "MENT) ACT, 1965".
On page 162, in the last line, for "Secretary" read "Secy, to the Govt. of India". [ On page 162, in the margin, fourth line, jor "Act of 43" read "Act 43".
PRINTED IN INDIA, BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS.
MINTO ROAD, NEW DELHI AND PUBLISHED BY THE MANAQEH OF PUBLICATIONS, DELHI, 1966 LSI—159 G of I Ex,—1-6-65—G747.