The Income-tax Act, 2025

1. (1) The eligible investment fund referred to in section 9(12) shall be a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit, and fulfils the following conditions:—

(a) the fund is not a person resident in India;

(b) the fund is—

(i) a resident of a country or a specified territory with which an agreement referred to in section 159(1) or (2) has been entered into; or

(ii) established or incorporated or registered in a country or a specified territory as the Central Government may, by notification, specify;

(c) the aggregate participation or investment in the fund, directly by persons resident in India, does not exceed 5% of the corpus of the fund as on the 1st April and the 1st October of the tax year, and—

(i) for the purposes of calculation of such aggregate participation or investment in the fund, any contribution up to twenty-five crore rupees made by the eligible fund manager during the first three years of operation of the fund shall not be taken into account; or

(ii) where the said aggregate participation or investment in the fund exceeds 5% on the 1st April or the 1st October of the tax year, the condition mentioned in this clause shall be deemed to be satisfied, if it is satisfied within four months of the 1st April or the 1st October, as the case may be, of such tax year;

(d) the fund shall not carry on or control and manage, directly or indirectly, any business in India; and

(e) no person acting on behalf of the fund engages in any activity which constitutes a business connection in India other than the activities undertaken by the eligible fund manager on its behalf.

(2) The eligible fund manager referred to in section 9(12), in respect of an eligible investment fund, shall be any person who is engaged in the activity of fund management and fulfils the following conditions:—

(a) the person is not an employee of the eligible investment fund or a connected person of such fund;

(b) the person is registered as a fund manager or an investment advisor in accordance with the specified regulations;

(c) the person is acting in the ordinary course of his business as a fund manager; and

(d) the person along with his connected persons shall not be entitled, directly or indirectly, to more than 20% of the profits accruing or arising to the eligible investment fund from the transactions carried out by the fund through the fund manager.

(3) Every eligible investment fund shall, in respect of its activities in a tax year, furnish within ninety days from the end of the tax year,—

(a) a statement in the prescribed form to the prescribed income-tax authority containing information relating to the fulfilment of the conditions specified in this Schedule; and

(b) provide such other relevant information or documents, as may be prescribed.

(4) The provisions of this Schedule shall apply as per such guidelines and in such manner, as the Board may prescribe in this behalf.

2. In this Schedule, the expressions—

(a) "connected person" shall have the meaning assigned to it in section 184(5);

(b) "corpus" means the total amount of funds raised for the purpose of investment by the eligible investment fund as on a particular date;

(c) "specified regulations" means—

(i) the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013; or

(ii) the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020; or

(iii) such other regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as may be notified in this behalf.]

In computing the total income of a person for a tax year, the income mentioned in column B of the Table below shall not be included, subject to fulfilment of the conditions mentioned in column C of the said Table, and the expressions used in columns B and C of the said Table, shall have the meaning respectively assigned to them in the Notes below the said Table.

Table Sl. No. Income not to be included in total income Conditions A B C 1. Agricultural income. Nil. 2. Any sum received under a life insurance (a) The insurance policies, issued during the period mentioned in column B of the table policy, including the sum allocated by way of below, except where such sum is received on the death of a person, under a life Insurance bonus on such policy. policy issued by, shall fulfil the conditions mentioned in column C thereof: Sl. Period of issue of Conditions No. insurance policy A B C 1. 1st April, 2003 to 31st Premium to sum assured ratio is ≤ 20%. March, 2012. 2. 1st April, 2012 to 31st Premium to sum assured ratio is ≤ 10%. March, 2013. 3. 1st April, 2013 to 31st Premium to sum assured ratio is ≤ 15% for special policy; and ≤ January, 2021. 10% for other policies. 4. 1st February, 2021 to Unit linked insurance policy:— 31st March, 2023.

(A) premium to sum assured ratio is ≤ 15% for special policy; and ≤ 10% for other policies; and

(B) aggregate of premium for all such policies (in any of the tax years during the term of all of such policies) is ≤ ₹ 2,50,000. Other than unit linked insurance policy:— Premium to sum assured ratio is ≤ 15% for special policy; and ≤ 10% for other policies. 5. On or after the 1st Unit linked insurance policy:— April, 2023.

(a) premium to sum assured ratio is ≤ 15% for special policy; and ≤ 10% for other policies; and

(b) aggregate of premium for all such policies (in any of the tax years during the term of all of such policies) ≤ ₹ 2,50,000. Other than Unit linked insurance policy:—

(i) premium to sum assured ratio is ≤ 15% for special policy; and ≤ 10% for other policies; and

(ii) aggregate of premium for all such policies (in any of the tax years during the term of all of such policies) is ≤ ₹ 5,00,000;

(b) the conditions of aggregate premium of ₹ 2,50,000 and ₹ 5,00,000 mentioned in clause

(a) shall not apply to any sum received under a life Insurance policy issued on or after the 1st April, 2025, by the International Financial Services Centre Insurance Office;

(c) the following sums shall not be eligible for exclusion from total income:—

(i) any sum received under section 127(4); and

(ii) any sum received under a Keyman insurance policy.

Note.—For removal of difficulties, the Board may issue guidelines with the previous approval of the Central Government, which shall be binding on the income-tax authorities and the assessee and every guideline issued by the Board under this clause shall be laid before each House of Parliament. 3. Any payment from a provident fund to which (a) The income by way of interest accrued during the tax year shall not be eligible for the Provident Funds Act, 1925 (19 of 1925) exclusion from total income where,— applies, or from any other provident fund set (i) it is attributable to the contribution (including aggregate thereof) made by that up by the Central Government and notified person on or after the 1st April, 2021; by it in this behalf. (ii) such contribution exceeds—

(A) ₹ 5,00,000 in a tax year in such fund where no contribution is made by the employer of such person;

(B) ₹ 2,50,000 in other cases; and

(b) the amount of income not to be excluded from total income as referred to in clause (a) shall be computed in such manner, as may be prescribed. 4. The accumulated balance due and becoming (a) The income by way of interest accrued during the tax year shall not be eligible for payable to an employee participating in a exclusion from total income where,— recognised provident fund to the extent (i) it is attributable to contribution (including aggregate thereof) made by that provided in paragraph 8 of Part A of the person on or after the 1st April, 2021; and Schedule XI. (ii) such contribution exceeds—

(A) ₹ 5,00,000 in a financial year in such fund where no contribution is made by the employer of such person; or

(B) ₹ 2,50,000 in other cases; and

(b) the amount of income not to be excluded from total income as referred to in clause (a) shall be computed in such manner as may be prescribed. 5. Any payment from any account opened as Nil. per the Sukanya Samriddhi Account Scheme, 2019 made under the Government Savings Promotion Act, 1873 (5 of 1873). 6. Any payment from the National Pension (a) Such payment is on closure of account of the assessee or on his opting out of the pension System Trust. scheme referred to in section 124; and

(b) the said payment does not exceed 60% of the total amount payable at the time of such closure or his opting out of the scheme. 7. Any payment from the Agniveer Corpus Nil. Fund to a person enrolled under the Agnipath Scheme or to his nominee. 8. Any payment from an approved Such payment is made— superannuation fund.

(a) on the death of a beneficiary;

(b) 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 incapacitated prior to such retirement;

(c) by way of refund of contributions on the death of a beneficiary;

(d) 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; or

(e) by way of transfer to the account of the employee under a pension scheme referred to in section 124 and notified by the Central Government in this behalf. 9. Scholarships. Such scholarship is granted to meet the cost of education. 10. Any payment made, whether in cash or in Such payment is made— kind for any award or reward.

(a) 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 approved by the Central Government in this behalf; or

(b) as a reward by the Central Government or any State Government for such purposes as may be approved by the Central Government in this behalf in public interest. 11. Income by way of interest, premium on Such certificates and deposits are notified by the Central Government, subject to such conditions redemption or other payment on such and limits as specified therein. securities, bonds, annuity certificates, savings certificates, other certificates issued by the Central Government and deposits. 12. Interest on Gold Deposit Bonds issued under Nil. the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government. 13. Interest on bonds issued by a local authority As specified by the Central Government, by notification. or by a State Pooled Finance Entity. 14. Any income arising from the transfer of a The transfer of such asset takes place on or after the 1st April, 2002. 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). 15. Any payment from the National Pension (a) such payment received at the time of his superannuation or voluntary retirement or System Trust received by an assessee, who is retirement under rule 56(j) of the Fundamental Rules [which is not treated as penalty a subscriber to the Unified Pension Scheme; under the Central Civil Services (Classification, Control and Appeal) Rules, 1965]; and

(b) the said payment does not exceed 60% of the Individual corpus, as defined in notification number FX-1/3/2024-PR of the Department of Financial Services, dated the 24th January, 2025; 16. Any sum received as “lump sum amount” The said “lump sum amount” is as per clause (vi) of Para 2, of the Notification number FX-from the National Pension System Trust by 1/3/2024-PR of the Department of Financial Services, dated the 24th January, 2025. an assessee being a subscriber to the Unified Pension Scheme. 17. Any income covered under section 10(15) Nil.

(iii) or (15)(iv)(c), (15)(iv)(d), (15)(iv)(e),

(15)(iv)(f), (15)(iv)(g) or (15)(iv)(h) or (36) of the Income-tax Act, 1961 (43 of 1961), subject to the conditions as provided therein.

Note 1: For the purposes of Sl. No. 2,—

(a) “actual capital sum assured” shall have the meaning assigned to it in paragraph 2(2) of Schedule XV;

(b) “International Financial Services Centre Insurance Office” shall have the same meaning as assigned to it regulation 3(1)(k) of the International Financial Services Centre Authority (Registration of Insurance Business) Regulations, 2021, made under the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(c) “Keyman insurance policy” means a life insurance policy—

(i) taken by a person on the life of another person;

(ii) such person is or was the employee of the first-mentioned person or is or was connected in any manner with the business of the first-mentioned person; and

(iii) includes such policy which has been assigned to a person at any time during the term of the policy, with or without any consideration;

(d) “premium to sum assured ratio” shall mean the highest percentage of annual premium payable to the actual capital sum assured, during the term of the policy;

(e) “special policy” means any policy issued on life of any person, who is—

(i) a person with disability or a person with severe disability as referred to in section 154; or

(ii) suffering from disease or ailment as specified in the rules made under section 128;

(f) “United Linked Insurance Policy” means a unit linked life insurance policy,—

(i) which has components of both investment and insurance; and

(ii) is linked to a unit as defined in regulation 3(ee) of the Insurance Regulatory and Development Authority of India (Unit Linked Insurance Products) Regulations, 2019 made under the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);

Note 2: For the purposes of Sl. No. 7, the expression “Agniveer Corpus Fund” and “Agnipath Scheme” shall have the meanings respectively assigned to them in section 125.

Note 3: For the purposes of Sl. No. 11, the expression “interest” includes hedging transaction charges on account of currency fluctuation.

Note 4: For the purposes of Sl. No. 13, the expression “State Pooled Finance Entity” means such entity which is set up as per the guidelines for the Pooled Finance Development Scheme notified by the Central Government in the Ministry of Housing and Urban Affairs.

In computing the total income of a tax year of any eligible person mentioned in column C of the Table below, the income mentioned in column B of the said

Table shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D therein shall have the meanings respectively assigned to them in the Notes below the said Table:

³⁷[38A. Disability Pension received An individual who has been a member of the armed forces (a) The individual has been invalided out of service (including service element and (including paramilitary forces) of the Union. in the armed forces on account of bodily disability disability element). attributable to, or aggravated by such service; and

(b) the individual has not retired on superannuation or otherwise. 38B. Any interest on compensation An individual or his legal heir. Such interest is received under the Motor Vehicles amount awarded by Motor Act, 1988 (59 of 1988). Accident Claims Tribunal. 38C. Any income in respect of any An individual or a Hindu undivided family. Such award or agreement is made under the award or agreement made on provisions of the Right to Fair Compensation and account of compulsory Transparency in Land Acquisition, Rehabilitation acquisition of any land. and Resettlement Act, 2013 (30 of 2013), except under section 46 of the said Act. 38D. Any income chargeable under An individual or a Hindu undivided family. (a) Such eligible person was the owner of such the head "Capital gains" arising specified capital asset as on the 2nd June, 2014; from the transfer of specified

(b) such specified capital asset is transferred under capital asset. the Land Pooling Scheme covered under the Andhra Pradesh Capital City Land Pooling Scheme (Formulation and Implementation) Rules, 2015 made under the provisions of the Andhra Pradesh Capital Region Development Authority Act, 2014 (Andhra Pradesh Act 11 of 2014) and the rules, regulations and Schemes made under the said Act; and

(c) such eligible person was handed over possession of reconstituted plot or land on or

before the 31st March, 2031.] 39. Any income falling under section 10(15)(iic) or (15)(iv)(i) or (19A) or (40) of the Income-tax Act, 1961(43 of 1961), shall be subject to the conditions as provided therein.

Note 1.—For the purposes of Sl. No. 3, the expression "disaster" shall have the same meaning as assigned to it in section 2(d) of the Disaster Management Act, 2005 (53 of 2005).

Note 2.—For the purposes of Sl. Nos. 8 and 15, the expression "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.

Note 3.—For the purposes of Sl. No. 18, the expression "compensation or consideration" includes the compensation or consideration enhanced or further enhanced by any court, Tribunal or other authority.

Note 4.—For the purposes of Sl. No. 20, the expression "Sikkimese" means—

(i) an individual, whose name is recorded in the register maintained under the Sikkim Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 (herein referred to as the "Register of Sikkim Subjects"), immediately before the 26th April, 1975;

(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;

(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 the father or husband or paternal grand-father or brother from the same father of such individual has been recorded in that register;

(iv) any other individual, whose name does not appear in the Register of Sikkim Subjects but it is established that such individual was domiciled in Sikkim on or before the 26th April, 1975; or

(v) any other individual, who was not domiciled in Sikkim on or before the 26th April, 1975, but it is established beyond doubt that the father or husband or paternal grand-father or brother from the same father of such individual was domiciled in Sikkim on or before the 26th April, 1975.

Note 5.—For the purposes of Sl. No. 21, the expression "concerned Board" means—

(i) in relation to tea, the Tea Board shall mean the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953);

(ii) in relation to rubber, the Rubber Board constituted under section 4 of the Rubber Act, 1947 (24 of 1947);

(iii) in relation to coffee, the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942);

(iv) in relation to cardamom, the Spices Board constituted under section 3 of the Spices Board Act, 1986 (10 of 1986);

(v) in relation to any other commodity, any Board or other authority established under any law for the time being in force which the Central Government may, by notification, specify in this behalf.

Note 6.—For the purposes of Sl. No. 22, the expression "local authority" means—

(i) Panchayat as referred to in article 243(d) of the Constitution; or

(ii) Municipality as referred to in article 243P(e) of the Constitution; 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 constituted under section 3 of the Cantonments Act, 2006 (4 of 2006).

Note 7.—For the purposes of Sl. No. 25,—

(a) "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); and

(b) "khadi" and "village industries" shall have the same meanings as respectively assigned to them in that Act.

Note 8.—For the purposes of Sl. No. 26,—

(a) "securitisation" shall have the same meaning as assigned to it,—

(i) in regulation 2(1)(r) 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) in section 2(1)(z) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); or

(iii) 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 section 221(6)(d).

Note 9.—For the purposes of Sl. No. 28,— "commodity exchange" shall mean a registered association as defined in section 2(jj) of the Forward Contracts (Regulation) Act, 1952 (74 of 1952).

Note 10.— For the purposes of Sl. No. 29,—

(a) "depository" shall have the same meaning as assigned to it in section 2(1)(e) of the Depositories Act, 1996 (22 of 1996);

(b) "regulations" shall mean the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Depositories Act, 1996 (22 of 1996).

Note 11: For the purposes of Sl. No. 30,—

(a) "recognised clearing corporation" shall have the same meaning as assigned to it in—

(i) regulation 2(1)(p) of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 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) regulation 2(1)(n) of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(b) "regulations" means—

(i) the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 made under the Securities Contracts (Regulation) Act, 1956 (42 of 1956); or

(ii) the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(c) "specified person" means—

(i) any recognised clearing corporation which establishes and maintains the Core Settlement Guarantee Fund;

(ii) any recognised stock exchange, being a shareholder in such recognised clearing corporation, or a contributor to the Core Settlement Guarantee Fund; and

(iii) any clearing member contributing to the Core Settlement Guarantee Fund.

³⁸[Note 12: For the purposes of Sl. No. 38A,—

(a) the provisions as mentioned against the said serial number shall apply on or after such date as may be notified by the Central Government in this behalf; and

(b) pending such notification, the entire disability pension, that is, disability element and service element of a disabled officer of the Indian armed forces shall be exempt from income-tax.

Note 13: For the purposes of Sl. No. 38D, "specified capital asset" means —

(a) the land or building or both owned by the assessee as on the 2nd June, 2014 and which has been transferred under the Scheme; or

(b) the land pooling ownership certificate issued under the Scheme to the assessee in respect of land or building or both referred to in clause (a); or

(c) the reconstituted plot or land, as the case may be, received by the assessee in lieu of land or building or both referred to in clause (a) in accordance with the Scheme, if such plot or land, as the case may be, so received is transferred within two years from the end of the financial year in which the

possession of such plot or land was handed over to him.]

In computing the total income of a tax year of any eligible person mentioned in column C of the Table below, the income mentioned in column B of the said

Table shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D shall have the meanings respectively assigned to them in the Notes below the said Table:

⁴⁸[13A. Any income arising on account of A foreign company, who is providing capital

(a) Ownership of such capital goods, equipment or providing capital goods, equipment or goods, equipment or tooling to the contract tooling remains with the foreign company; tooling to a contract manufacturer, manufacturer for use in electronic (b) such capital goods, equipment or tooling is under being a company resident in India. manufacturing in India. the control and direction of the contract manufacturer;

(c) the contract manufacturer is located in a custom bonded area, that is, a warehouse referred to in section 65 of the Customs Act, 1962 (52 of 1962);

^48a[(d) the contract manufacturer produces specified electronic goods on behalf of the foreign

company for a consideration; and]

(e) such exemption shall be available up to the tax

year ^48b[2040-2041]. 13B. Any income which accrues or arises An individual, being a non-resident for a (a) Such individual, during the relevant tax year outside India, and is not deemed to period of five consecutive tax years renders any service in India in connection with accrue or arise in India. immediately preceding the tax year during any scheme as may be notified by the Central which he visits India for the first time for Government; rendering services in India in connection (b) such exemption shall not be available beyond a with any scheme as may be notified by the period of five consecutive tax years commencing Central Government. from the first tax year during which he visits India in connection with such scheme; and

(c) such other conditions, as may be prescribed.

13C. Any income accruing or arising in India A foreign company. (a) ⁴⁹[***] or deemed to accrue or arise in India (b) such foreign company does not own or operate by way of procuring data centre any of the physical infrastructure or any services from a specified data centre. resources of the specified data centre;

(c) all sales by such foreign company to users located in India are made through a reseller entity being an Indian company;

(d) such foreign company maintains and furnishes such information in such form and manner, as may be prescribed; and

(e) such exemption shall be available up to tax year

ending on the 31st March, 2047.]

^49a[13D. Any interest on Government security, and A Foreign Institutional Investor. Such exemption shall be subject to furnishing of any capital gains arising from the sale, information in such form and manner, as may be exchange or transfer of such Government prescribed. security. 13E. Any interest on Government security, and Bank for International Settlements. Such exemption shall be subject to furnishing of any capital gains arising from the sale, information in such form and manner, as may be

exchange or transfer of such Government prescribed.] security.

^49b[13F. Any income on sale of rough diamonds. A foreign company—

(a) The sale of rough diamonds is carried out in any

(a) engaged in the business of diamond notified special zone as referred to in section 9(9) mining; or (c)(ii)(C);

(b) being a sightholder of the company (b) such foreign company maintains and furnishes referred to in clause (a); or such information in such form and manner, as may be prescribed; and

(c) being a broker, aggregator or a tender and auction entity connected (c) such exemption shall be available up to the tax with sale of rough diamonds. year ending on the 31st March, 2041. 13G. Any income accruing or arising on A foreign company, which stores (a) Such exemption shall be available on sale of account of storage of components in a components in a warehouse in a custom components by such foreign company; warehouse in a custom bonded area. bonded area for providing them to a (b) such contract manufacturer produces electronic contract manufacturer to be used for goods on behalf of any foreign company; manufacturing of specified electronic (c) such exemption shall be subject to furnishing of goods. information in such form and manner, as may be prescribed; and

(d) such exemption shall be available up to the tax

year ending on the 31st March, 2041.] 14. Any income falling under section 10(6A), (6B), (6BB), (15A), (15)(iiia),

(15)(iiib), (15)(iiic) or (15)(iv)(a), (15)

(iv)(b) or (15)(iv)(fa) of the Income-tax Act, 1961 (43 of 1961) subject to the conditions as specified therein.

Note 1.—For the purposes of Sl. No. 9, —

(a) "specified company" means any company, other than a domestic company which operates cruise ships in India and opts to pay tax as per the provisions of section 61(2) (Table: Sl. No. 2);

(b) "holding company", in relation to a foreign company or a specified company, means a company of which such companies are subsidiary companies; and

(c) "subsidiary company" or "subsidiary", in relation to a holding company, means a company in which the holding company exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies.

Note 2: For the purposes of Sl. No. 10, — "European Economic Community" means the European Economic Community established by the Treaty of Rome of 25th March, 1957.

^49c[Note 2A: For the purposes of Sl. No. 13A, the expression "specified electronic goods" means—

(a) mobile phones; or

(b) laptops, all-in-one personal computers and tablets; or

(c) servers and ultra small form factor (USFF); or

(d) sub-assemblies to the finished goods mentioned in clauses (a) to (c); or

(e) hearables and wearables and accessories related to the finished goods mentioned in clauses (a) to (c).]

⁵⁰[Note 3: For the purposes of Sl. No. 13C, —

(a) "data centre" means a dedicated secure space within a building or centralised location where computing and networking equipment is concentrated for the purpose of collecting, storing, processing, distributing or allowing access to large amounts of data;

(b) "data centre services" means the services provided by a data centre through the use of physical infrastructure including land, buildings, mechanical electrical power equipments, cooling system, security and information technology infrastructure including servers, computers, storage systems, operating systems, security solutions, network and associated software platforms, networking and other equipment, human resource in India;

⁵¹[(c) "specified data centre" means a data centre which—

(i) is operated by an Indian company, whether by way of owning or leasing; and

(ii) satisfies such other conditions as may be prescribed.]]

^51a[Note 4: For the purposes of Sl. Nos. 13D and 13E,—

(a) "Bank for International Settlements" means the Bank for International Settlements established at the Hague Conference in 1930 and headquartered at Basel, Switzerland;

(b) "Foreign Institutional Investor" shall have the meaning assigned to it in section 210(6)(a);

(c) "Government security" shall have the same meaning as assigned to it in section 2(f) of the Government Securities Act, 2006 (38 of 2006).]

^51b[Note 5: For the purposes of Sl. No. 13F, the expression "rough diamond" means any diamond that is unworked or simply sawn, cleaved or bruted and falling under the Tariff Heading 7102 10, 7102 21, or 7102 31 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and accompanied by the Kimberley Process Certificate.

Note 6: For the purposes of Sl. No. 13G,—

(a) "contract manufacturer" means an Indian company which produces specified electronic goods on behalf of any foreign company in a custom bonded area;

(b) "custom bonded area" means a warehouse as referred to in section 65 of the Customs Act, 1962 (52 of 1962); and

(c) "specified electronic goods" shall have the meaning assigned to it in Note 2A.]

In computing the total income of a tax year of any eligible person mentioned in column C of the Table below, the income mentioned in column B of the said

Table shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D of the said Table shall have the meanings respectively assigned to them in Notes below the said Table:

(b) ⁶⁶[***]

(c) income of a business trust, being a real estate investment trust, by way of renting or leasing or letting out any real estate asset owned directly by such business trust. 6. Any income from investment in a Venture capital Nil. venture capital undertaking. company or venture capital fund other than an investment fund specified in section 224(10)(a). 7. Any income of the nature of— A specified person. (a) Such investment—

(a) dividend; (i) is made on or after the 1st April, 2020 but on or before the 31st March,

(b) interest; 2030;

(c) any sum referred to in (ii) is held for at least three years; and section 92(2)(k); or (iii) is in,—

(d) long-term capital gains (A) a business trust being an eligible InvIT; (whe-ther or not such (B) an eligible infrastructure entity; capital gains are deemed (C) an eligible Alternate Investment Fund; as short-term capital gains (D) an eligible domestic company; or under section 76), (E) an eligible Non- banking Financial Company; arising from an investment made

(b) if any difficulty arises in interpreting or implementing the provisions, the Board may by a specified person in India, issue guidelines; whether in the form of debt or

(c) such guidelines shall be— share capital or unit.

(i) issued with the previous approval of the Central Government;

(ii) laid before each House of Parliament; and

(iii) binding on the Income- tax Authority and the specified person;

(d) where any income has not been included in the total income of the specified person, and subsequently during any tax year the specified person fails to satisfy any of these conditions so that the said income would not have been eligible for such non-inclusion, such income shall be chargeable to income-tax as the income of the specified person of that tax year;

(e) where an eligible Alternate Investment Fund has investment of less than 100% in one or more of eligible infrastructure entity or eligible domestic company or eligible Non-Banking Financial Company or in an eligible InvIT, income accrued or arisen or received or attributable to such investment, directly or indirectly, which is exempt herein shall be calculated proportionately to that investment made in one or more of the eligible infrastructure entity or eligible domestic company or eligible Non-Banking Financial Company or in an eligible InvIT, in such manner as may be prescribed;

(f) where an eligible domestic company has investment of less than 100% in one or more of the eligible infrastructure entity, income accrued or arisen or received or attributable to such investments, directly or indirectly, which is exempt herein shall be calculated proportionately to the investment made in one or more of the eligible infrastructure entity, in such manner, as may be prescribed;

(g) where an eligible Non-Banking Financial Company has lending of less than 100% in one or more of the eligible infrastructure entity, income accrued or arisen or received or attributable to such lending, directly or indirectly, which is exempt herein shall be calculated proportionately to the lending made in eligible infrastructure entity, in such manner, as may be prescribed;

(h) in case a sovereign wealth fund or pension fund has loans or borrowings, directly or indirectly, for the purposes of making investment in India, such fund shall be deemed to be not eligible for exclusion from total income. 8. Any income falling under section 10(23F) and (23FA) of the Income-tax Act, 1961 (43 of 1961), subject to the conditions as specified therein.

Note 1.—For the purposes of Sl. Nos. 1 and 2, the expression "investment fund" shall have the meaning assigned to it in section 224(10)(a).

Note 2.—For the purposes of Sl. No. 3, 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 law under which such trust is granted registration.

Note 3.—For the purposes of Sl. Nos. 4 and 5, the expression "real estate asset" shall have the same meaning as assigned to it in regulation 2(1)(zj) of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).

Note 4.—For the purposes of Sl. No. 6,—

(a) "venture capital company" means a company which—

(i) has been granted a certificate of registration, before the 21st May, 2012, as a Venture Capital Fund and is regulated under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 (herein referred to as the Venture Capital Funds Regulations) made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or

(ii) 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 (herein 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:—

(A) it is not listed on a recognised stock exchange;

(B) 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

(C) 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 10% of its equity share capital) holds, either individually or collectively, equity shares in excess of 15% of the paid-up equity share capital of such venture capital undertaking;

(b) "venture capital fund" means a fund—

(i) operating under a trust deed registered under the provisions of the Registration Act, 1908 (16 of 1908), which—

(A) has been granted a certificate of registration, before the 21st May, 2012, as a Venture Capital Fund and is regulated under the Venture Capital Funds Regulations; or

(B) 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 or as referred to in regulation 18(2) of the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019), and which fulfils the following conditions:—

(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 15% of the paid-up equity share capital of such venture capital undertaking;

(III) the units, if any, issued by it are not listed in any recognised stock exchange; and

(IV) any other condition as may be prescribed; or

(ii) operating as a venture capital scheme made by the Unit Trust of India;

(c) "venture capital undertaking" means—

(i) a venture capital undertaking as defined in regulation 2(n) of the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996; or

(ii) a venture capital undertaking as defined in regulation 2(1)(aa) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.

Note 5.—For the purposes of Sl. No. 7,—

(a) "specified person" means—

(i) a wholly owned subsidiary of the Abu Dhabi Investment Authority, which—

(A) is a resident of the United Arab Emirates; and

(B) makes investment, directly or indirectly, out of the fund owned by the Government of Abu Dhabi;

(ii) a sovereign wealth fund, which satisfies the following conditions:—

(A) it is wholly owned and controlled, directly or indirectly, by the government of a foreign country;

(B) it is set up and regulated under the law of such foreign country;

(C) the earnings of the said fund are credited either to the account of the government of that foreign country or to any other account designated by that government so that no portion of the earnings enures any benefit to any private person;

(D) the asset of the said fund vests in the government of such foreign country upon dissolution;

(E) the provisions of items (C) and (D) shall not apply to any payment made to creditors or depositors for loan taken or borrowing for the purposes other than for making investment in India;

(F) it does not participate in the day-to-day operations of investee but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in the day to day operations of the investee; and

(G) it is specified by the Central Government, by notification for this purpose and fulfils the conditions specified in such notification;

(iii) a pension fund, which—

(A) is created or established under the law of a foreign country including the laws made by any of its political constituents, being a province, State or local body, by whatever name called;

(B) is not liable to tax in such foreign country or if liable to tax, exemption from taxation for all its income has been provided by such foreign country;

(C) does not participate in the day-to-day operations of investee but the monitoring mechanism to protect the investment with the investee including the right to appoint directors or executive director shall not be considered as participation in day-to-day operations of the investee;

(D) is specified by the Central Government, by notification for this purpose and fulfils conditions specified in such notification; and

(E) satisfies such other conditions as may be prescribed;

(iv) the Public Investment Fund of the Government of the Kingdom of Saudi Arabia;

(v) a wholly owned subsidiary of the Public Investment Fund of the Government of the Kingdom of Saudi Arabia, which—

(A) is a resident of Saudi Arabia; and

(B) makes investment, directly or indirectly, out of the fund owned by such Government;

(b) "investee" means a business trust or eligible infrastructure entity or eligible Alternate Investment Fund or eligible domestic company or eligible Non-Banking Financial Company, in which the sovereign wealth fund or the pension fund has made the investment directly or indirectly;

(c) "loan and borrowing" means—

(i) any loan taken or borrowing by a sovereign wealth fund from or any deposit or investment made in a sovereign wealth fund by, any person other than the Government of the country in which the sovereign wealth fund is set up;

(ii) any loan taken or borrowing by a pension fund from or any deposit or investment made in a pension fund by any person, but shall not include —

(A) the deposit or investment which represents statutory obligations and defined contributions of one or more funds or plans established for providing retirement, social security, employment, disability or death benefits; or

(B) any similar compensation to the participants or beneficiaries of such funds or plans, as the case may be;

(d) "eligible infrastructure entity" means a company or enterprise or an entity carrying on—

(i) the business of developing, or operating and maintaining, or developing, operating and maintaining an infrastructure facility as defined in section 138; or

(ii) such other business as the Central Government may, by notification, specify in this behalf;

(e) "eligible Alternate Investment Fund" means Category-I or Category-II Alternative Investment Fund—

(i) regulated under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(ii) having not less than 50% investment in one or more of the eligible infrastructure entity or eligible domestic company or eligible Non-Banking Financial Company or in an eligible InvIT, computed in such manner as may be prescribed;

(f) "eligible domestic company" means a domestic company—

(i) set up and registered on or after the 1st April, 2021; and

(ii) having minimum 75% investments in one or more of the eligible infrastructure entities, computed in such manner, as may be prescribed;

(g) "eligible Non-Banking Financial Company" means—

(i) a non-banking financial company registered as an Infrastructure Finance Company as referred to in notification number RBI/2009-10/316 issued by the Reserve Bank of India or in an Infrastructure Debt Fund, a non-banking finance company as referred to in the Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulations) Directions, 2023, issued by the Reserve Bank of India; and

(ii) having minimum 90% lending to one or more of eligible infrastructure entities, computed in such manner, as may be prescribed; and

(h) "eligible InvIT" means an Infrastructure Investment Trust referred to in section 2(21)(a).

In computing the total income of a tax year of any eligible person, as mentioned in column C of the Table below, the income mentioned in column B of the said Table and the income as mentioned in savings clause shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D of the said Table, shall have the meanings respectively assigned to them in the Notes below the said Table.

Note 1: For the purposes of Sl. Nos. 1 to 4,—

(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 the rules made thereunder;

(b) "investment division of offshore banking unit" means an investment division of a banking unit of a non-resident located in an International Financial Services Centre as referred to in section 147 and which has commenced its operations on or before the 31st March, 2030;

(c) "manager" shall have the same meaning as assigned to it in regulation 2(1)(q) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(d) "permanent establishment" shall have the meaning assigned to it in section 173(c);

(e) "securities" shall have the same meaning as assigned to it in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and shall also include such other securities or instruments as may be notified by the Central Government in this behalf;

(f) "securitisation trust" shall have the meaning assigned to it in section 221(6)(d);

(g) "specified fund" means—

(i) a fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate and located in International Financial Services Centres,—

(A) which has been granted a certificate of registration as a Category III Alternative Investment Fund and is regulated—

(I) under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(II) under the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019); or

(B) which has been granted a certificate as a retail scheme or an Exchange Traded Fund, and satisfies the conditions laid down for such schemes or funds under the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019);

⁴¹[(C) of which all the units other than the unit held by a sponsor or manager are held by non-residents except,—

(I) where such non-resident becomes resident under section 6(2) or (3) or (4) or (5) or (6) or (7) in any tax year subsequent to that tax year; and

(II) the number of units held by such resident unit holder or holders do not exceed 5% of the total units issued and shall fulfil

such other conditions as may be prescribed; or]

(ii) investment division of an offshore banking unit, which has been—

(A) granted a certificate of registration as a Category-I foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and

which has commenced its operations on or before the 31st March, ⁴²[2030]; and

(B) fulfils such conditions including maintenance of separate accounts for its investment division, as may be prescribed;

(h) "sponsor" shall have the same meaning as assigned to it in regulation 2(1)(w) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(i) "trust" means a trust established under the Indian Trusts Act, 1882 (2 of 1882) or under any other law;

(j) "units" mean beneficial interest of an investor in the fund and shall include shares or partnership interests.

Note 2: For the purposes of Sl. No. 5,— "Foreign Portfolio Investor" shall mean a person registered as per the provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).

Note 3: For the purposes of Sl. Nos. 6, 8 and 11,—

(a) "aircraft" means an aircraft or a helicopter, or an engine of an aircraft or a helicopter, or any part thereof;

(b) "ship" means a ship or an ocean vessel, engine of a ship or ocean vessel, or any part thereof.

Note 4: For the purposes of Sl. No. 7,— "portfolio manager" shall have the same meaning as assigned to it in regulation 2(1)(z) of the International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2021 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019).

Note 5: For the purposes of Sl. No. 9,—

(a) "specified fund" shall have the same meaning as assigned to it in Note 1(g);

(b) "unit" means beneficial interest of an investor in the fund and shall include shares or partnership interests.

Note 6: For the purposes of Sl. No. 10,—

(a) "original fund", "relocation" and "resultant fund" shall have the meanings respectively assigned to them in section 70(2);

(b) "specified fund" shall have the meaning assigned to it in Note 1(g).

Note 7: For the purposes of Sl. No. 12,— "Unit" shall have the same meaning as assigned to it in section 2(zc) of the Special Economic Zones Act, 2005 (28 of 2005).

Any eligible person, mentioned in column B of the Table below, shall not be liable to pay income-tax on the total income for any tax year, subject to the conditions mentioned in column C of the said Table, and the expression used in columns B and C of the said Table, shall have the meanings respectively assigned to them in the Notes below the said Table:

(a) dealing with and satisfying the need for housing accommodation;

(b) planning, development or improvement of cities, towns and villages;

(c) regulating, or regulating and developing, any activity for the benefit of the general public; or

(d) regulating any matter, for the benefit of the general public, arising out of the object for which it has been created. 43. National Credit Guarantee Trustee Company Limited, being a Nil. company established and wholly financed by the Central Government for the purposes of operating credit guarantee funds established and wholly financed by the Central Government. 44. A credit guarantee fund established and wholly financed by the Nil. Central Government and managed by the National Credit Guarantee Trustee Company Limited. 45. Credit Guarantee Fund Trust for Micro and Small Enterprises, being Nil. a trust created by the Central Government and the Small Industries Development Bank of India established under section 3(1) of the Small Industries Development Bank of India Act, 1989 (39 of 1989). 46. An infrastructure debt fund. Such fund is set up as per the guidelines issued by the Central Government, by notification. 47. An institution established for financing the infrastructure and Such exclusion from total income is for ten consecutive tax years, beginning development set up under an Act of Parliament. from the tax year in which such institution is set up and such institution is notified by the Central Government. 48. A developmental financing institution, licensed by the Reserve Bank (a) Such institution is notified by the Central Government; of India under an Act of Parliament referred to against serial number

(b) exclusion of such income from the total income is for five consecutive tax 47. years beginning from the tax year in which the developmental financing institution is set up; and

(c) the Central Government may, by notification extend the period of exclusion for a further period, not exceeding five more consecutive tax years, subject to fulfilment of such conditions as specified in the said notification.

⁴³[49. New Development Bank. Such exemption shall be subject to furnishing of information in such form and

manner, as may be prescribed.]

Note 1.—For the purposes of Sl. No. 3, the expression "Controller of Insurance" shall have the same meaning as assigned to it in section 2(5B) of the Insurance Act, 1938 (4 of 1938).

Note 2.—For the purposes of Sl. No. 4, the expression "khadi" and "village industries" shall have the meanings respectively assigned to them in the Khadi and Village Industries Commission Act, 1956 (61 of 1956).

Note 3.—For the purposes of Sl. No. 21, the expression "public financial institution" shall have the same meaning as assigned to it in section 2(72) of the Companies Act, 2013 (18 of 2013).

Note 4.—For the purposes of Sl. No. 29,—

(a) "Scheduled Castes" and "Scheduled Tribes" shall have the meanings respectively assigned to them in article 366(24) or (25) of the Constitution;

(b) "backward classes" means such classes of citizens, other than the Scheduled Castes and the Scheduled Tribes, as may be notified by the Central Government or any State Government.

Note 5.—For the purposes of Sl. No. 30, the expression "minority community" means a community notified as such by the Central Government.

Note 6.—For the purposes of Sl. No. 31, the expression "ex-servicemen" means persons—

(i) who have served in any rank, whether as combatant or non-combatant;

(ii) 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);

(iii) for a continuous period of not less than six months after attestation;

(iv) who have been released, otherwise than by way of dismissal or discharge on account of misconduct or inefficiency; and

(v) includes their wife, children, father, mother, minor brother, widowed daughter and widowed sister, wholly dependent upon such ex- servicemen, immediately before their death or incapacitation, in case of deceased or incapacitated ex-servicemen.

In computing the total income of a tax year of any eligible person, being a political party or an electoral trust, as mentioned in column C of the Table below, the income mentioned in column B of the said Table shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D of the said Table, shall have the meanings respectively assigned to them in the Note below the said Table:

Note.—For the purposes of this Schedule, "electoral bond" means a bond referred to in the Explanation to section 31(3) of the Reserve Bank of India Act, 1934 (2 of 1934).

1. (1) An assessee shall be allowed deduction of,--

(a) the amount or aggregate of the amounts deposited by the assessee in the account as specified in paragraph 2; or

(b) 40% of the profits of such business computed under the head "Profits and gains of business or profession" before making any deduction under this paragraph, whichever is less.

(2) The deduction shall be allowed before allowing set off of loss, if any, brought forward from earlier tax years as per section 112.

Conditions for claiming deduction.

2. (1) The deduction under paragraph 1 shall be allowed if the assessee--

(a) is carrying on the business of growing and manufacturing tea or coffee or rubber in India during the tax year;

(b) has, before the expiry of six months from the end of the tax year or before the due date of furnishing the return of his income, whichever is earlier, deposited any amount in the specified account being,—

(i) a special account maintained with the National Bank in accordance with, and for the purposes specified in the special scheme; or

(ii) a deposit account in accordance with, and for the purposes specified in the deposit scheme; and

(c) gets the accounts of such business for the relevant tax year audited by an accountant before the specified date referred to in section 63 and furnishes the audit report, in such form and manner as may be prescribed and verified by such accountant, by that date.

(2) Where the assessee is required, by or under any other law, to get his accounts audited, then it shall be sufficient compliance of sub-paragraph (1)(c), if such assessee—

(a) gets the accounts of such business audited under such law before the specified date referred to in section 63; and

(b) furnishes by that date the report of such audit and a report by an accountant in the form referred to in sub-paragraph (1)(c).

(3) If any deduction has been allowed under paragraph 1 in any tax year, no deduction shall be allowed in respect of such amount in any other tax year.

(4) Where the assessee referred to in paragraph 1 is a firm or an association of persons or body of individuals, the deduction under paragraph 1 shall not be allowed in computing the income of any of the partners or members of such assessee.

Withdrawal from special account or deposit account.

3. (1) Any amount standing to the credit of the assessee in the specified account shall not be allowed to be withdrawn except for the purpose specified in the special scheme or, in the deposit scheme, or in the circumstances specified below:—

(a) closure of business; or

(b) death of an assessee; or

(c) partition of a Hindu undivided family; or

(d) dissolution of a firm; or

(e) liquidation of a company.

(2) If any amount standing to the credit of the assessee in the specified account, is withdrawn during any tax year by the assessee in the circumstance referred to in sub-paragraph (1)(a) and (1)(d), the whole of such amount shall be deemed to be the profits and gains of business or profession of that tax year and shall accordingly be charged to income-tax for that tax year, as if the business had not been closed or, the firm had not been dissolved respectively.

(3) Irrespective of anything contained in sub-paragraph (1), if --

(a) any amount standing to the credit of the assessee in the specified account is released by the National Bank or withdrawn by the assessee from the Deposit account, during any tax year; and

(b) such amount is utilised for the purchase of specified articles or thing, then whole of such amount so utilised shall be deemed to be the profits and gains of business of that tax year and shall accordingly be charged to income-tax for that tax year.

(4) If any amount standing to the credit of the assessee--

(a) in the specified account is released by the National Bank; or

(b) is withdrawn by the assessee from the deposit account, during any tax year for utilisation for the purposes of such business as per the special scheme or deposit scheme and the same is not so utilised, either wholly or partly, within that tax year, such amount not so utilised shall be deemed to be the profits and gains of business of that tax year and shall accordingly be charged to income-tax for that tax year.

(5) The provisions of sub-paragraph (4) shall not apply in cases where amount is released during any tax year on closure of the account in circumstances referred to in sub-paragraphs (1)(b), (1)(c) and (1)(e).

(6) In sub-paragraph (3), "specified article or thing" means—

(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 tax 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 Schedule XIII.

No deduction of expenditure met through the amount withdrawn from specified account.

4. If the amount standing to the credit of the assessee in specified account is utilised to incur any expenditure for the purpose of such business as per the special scheme or deposit scheme, no deduction against such expenditure shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".

Sale or transfer of asset acquired as per special scheme or deposit scheme.

5. (1) Where any asset,--

(a) is acquired in accordance with the special scheme or the deposit scheme; and

(b) is sold or transferred to any person in the tax year at any time before expiry of eight years from the end of tax year in which such asset was acquired, then, the part of cost of asset which is relatable to the deduction allowed under paragraph 1 shall be deemed to be the profits and gains of business of the tax year in which such asset is sold or transferred and shall accordingly be charged to income-tax for that tax year.

(2) The provisions of sub-paragraph (1) shall not apply, if the asset is sold or transferred—

(a) by the assessee to the specified person; or

(b) by a firm to a company in connection with succession of business or profession of the firm by such company subject to the following conditions:--

(i) the provisions of special scheme or deposit scheme is applicable to the company in the same manner as it applied to the firm;

(ii) all the properties of the firm relating to the business or profession immediately before the succession become the properties of the company;

(iii) all the liabilities of the firm relating to the business or profession immediately before the succession become the liabilities of the company; and

(iv) all the shareholders of the company were partners of the firm immediately before the succession.

(3) In this paragraph, "specified person" means,--

(a) Government; or

(b) a local authority; or

(c) a corporation established by or under a Central, State or Provincial Act; or

(d) a Government company as defined in section 2(45) of the Companies Act, 2013 (18 of 2013).

Interpretation.

6. For the purposes of this Schedule,—

(a) "Coffee Board" means the Coffee Board constituted under section 4 of the Coffee Act, 1942 (7 of 1942);

(b) "deposit account" means an account opened by the assessee for making deposits by the assessee in accordance with and for the purposes specified in the deposit scheme;

(c) "deposit scheme" means the scheme made by the Tea Board or the Coffee Board or the Rubber Board, with the prior approval of the Central Government;

(d) "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);

(e) "Rubber Board" means the Rubber Board constituted under section 4(1) of the Rubber Act, 1947 (24 of 1947);

(f) "special account" means an account maintained by the assessee with the National Bank for making deposits in accordance with and for the purposes specified in the special scheme;

(g) "special scheme" means the scheme approved in this behalf by the Tea Board or the Coffee Board or the Rubber Board;

(h) "specified account" means a special account or a deposit account;

(i) "Tea Board" means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953).

1. (1) An assessee shall be allowed deduction of,--

(a) the amount or aggregate of the amount deposited by the assessee in the account as specified in paragraph 2; or

(b) 20% of the profits of such business computed under the head "Profits and gains of business or profession" before making any deduction under this paragraph, whichever is less.

(2) The deduction shall be allowed before allowing set off of loss, if any, brought forward from earlier tax years as per section 112.

(3) Any interest credited in the specified account shall be deemed to be a deposit.

Conditions for claiming deduction.

2. (1) Deduction under paragraph 1 shall be allowed if the assessee--

(a) is, during the tax year, carrying on the business consisting of the prospecting for, or extraction or production of, petroleum or natural gas, or both in India, and has entered into an agreement with the Central Government for such business;

(b) has, before the end of the tax year, deposited any amount in the specified account, being,--

(i) a special account maintained with the State Bank of India in accordance with, and for the purposes specified in the special scheme; or

(ii) a site restoration account in accordance with, and for the purposes specified in the deposit scheme; and

(c) gets the accounts of such business for the relevant tax year audited by an accountant before the specified date referred to in section 63 and furnishes the audit report, in such form and manner, as may be prescribed and verified by such accountant, by that date.

(2) Where the assessee is required, by or under any other law, to get his accounts audited, then it shall be sufficient compliance of sub-paragraph (1)(c), if such assessee—

(a) gets the accounts of such business audited under such law before the specified date referred to in section 63; and

(b) furnishes by that date the report of such audit and a report by an accountant in such form referred to in sub-paragraph (1)(c).

(3) If any deduction has been allowed under paragraph 1 in any tax year, no deduction shall be allowed in respect of such amount in any other tax year.

(4) Where the assessee referred to in paragraph 1 is a firm or an association of persons or body of individuals, deduction under paragraph 1 shall not be allowed in computing the income of any of the partners or members of such assessee.

Withdrawal from specified account.

3. (1) Any amount standing to the credit of the assessee in the specified account shall not be allowed to be withdrawn except for the purposes specified in the special scheme or in the deposit scheme.

(2)(a) Irrespective of anything contained in sub-paragraph (1), if the amount is utilised for the purchase of specified articles or things, then, such amount shall not be allowed as deduction under paragraph 1;

(b) for the purposes of this paragraph, "specified article or thing" means—

(i) any machinery or plant to be installed in any office premises or residential accommodation, including any accommodation in the nature of a guest-house;

(ii) any office appliances (except computers);

(iii) 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 tax year;

(iv) 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 Schedule XIII.

(3) Where any amount standing to the credit of the assessee in specified account is withdrawn on closure of such account in any tax year, then the amount computed as under shall be deemed to be the profits and gains of business or profession for the tax year and accordingly the following amount shall be charged to income-tax for that tax year: A = B - C where,— A = deemed profits and gains of business or profession of that tax year; B = amount withdrawn from the specified account on its closure; and C = amount, if any, payable to the Central Government by way of profit or production share as provided in agreement referred to in section 54.

(4) Where any amount is withdrawn on closure of specified account in a tax year in which the business of the assessee is no longer in existence, sub-paragraph

(3) shall apply as if the business is in existence in that tax year.

(5) If any amount standing to the credited of the assessee—

(a) in the specified account is released by the State Bank of India; or

(b) is withdrawn by the assessee from the site restoration account, during any tax year for utilisation for the purposes of such business as per the special scheme or deposit scheme and the same is not so utilised, either wholly or in part within that tax year, such amount shall be deemed to be the profits and gains of business of that tax year and accordingly be charged to income-tax for that tax 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".

No deduction of expenditure met through amount withdrawn from specified account.

4. (1) If the amount standing to the credit of the assessee in the specified account is utilised to incur any expenditure for the purpose of business as per the special scheme or deposit scheme, no deduction against such expenditure shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".

(2) In this paragraph, "amount standing to the credit of the assessee in the specified account" includes interest to such accounts.

Sale or transfer of asset acquired as per special scheme or deposit scheme.

5. (1) Where any asset,--

(a) is acquired as per the special scheme or the deposit scheme; and

(b) is sold or transferred to any person in the tax year at any time before the expiry of eight years from the end of tax year in which it was acquired, then, the part of cost of asset as is relatable to the deduction allowed under paragraph 1 shall be deemed to be the profits and gains of business of the tax year in which such asset is sold or transferred and shall accordingly be charged to income-tax for that tax year.

(2) Sub-paragraph (1) shall not apply, if the asset is sold or transferred by—

(a) the assessee to the specified person; or

(b) a firm to a company in connection with succession of business or profession of the firm by such company subject to the following conditions:—

(i) the provisions of special scheme or deposit scheme is applicable to the company in the same manner as it applied to the firm;

(ii) all the properties of the firm relating to the business or profession immediately before the succession becomes the properties of the company;

(iii) all the liabilities of the firm relating to the business or profession immediately before the succession becomes the liabilities of the company; and

(iv) all the shareholders of the company were partners of the firm immediately before the succession.

(3) In this paragraph, "specified person" means—

(a) Government; or

(b) a local authority; or

(c) a corporation established by or under a Central, State or Provincial Act; or

(d) a Government company as defined in section 2(45) of the Companies Act, 2013 (18 of 2013).

Interpretation.

6. For the purposes of this Schedule,—

(a) "amount standing to the credit of the assessee" pertaining to the specified account includes interest accrued to such accounts;

(b) "deposit scheme" means a scheme made in this behalf by the Ministry of Petroleum and Natural Gas;

(c) "specified account" means a special account or site restoration account;

(d) "special account" means an account maintained with the State Bank of India for making deposits in accordance with, and for the purposes specified in the special scheme;

(e) "special scheme" means a scheme approved in this behalf by the Government of India in the Ministry of Petroleum and Natural Gas;

(f) "site restoration account" means an account opened by the assessee for making deposits in accordance with, and for the purposes specified in the deposit scheme;

(g) "State Bank of India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955).

1. This Part shall not apply to any provident fund to which the Provident Funds Act, 1925 (19 of 1925), applies.

Definitions.

2. For the purposes of this Part, unless the context otherwise requires,—

(a) "approving authority" means the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner;

(b) "employer" means any person who maintains a provident fund for the benefit of his or its employees, being—

(i) a Hindu undivided family, company, firm or other association of persons, or

(ii) an individual engaged in a business or profession, the profits and gains whereof are assessable to income-tax under the head "Profits and gains of business or profession";

(c) "employee" means an employee participating in a provident fund, excluding personal or domestic servant;

(d) "contribution" means any sum credited by or on behalf of any employee out of his salary, or by an employer out of his own funds, to the individual account of an employee, excluding any sum credited as interest;

(e) "balance to the credit of an employee" means the total amount to the credit of his individual account in a provident fund at any time;

(f) "annual accretion", in relation to the balance to the credit of an employee means the increase to such balance, in any year arising from contributions and interest;

(g) "accumulated balance due to an employee" means the balance to his credit, or portion thereof claimable by the employee under the regulations of the fund, on the day he ceases to be an employee of the employer maintaining the fund;

(h) "regulations of a fund" means the specific regulations governing the constitution and administration of a particular provident fund; and

(i) "salary" includes dearness allowance, if provided for in the terms of employment, but excludes all other allowances and perquisites.

Recognition to provident fund and its withdrawal.

3. (1) The approving authority may grant recognition to a provident fund, which in his opinion, satisfies the conditions prescribed in paragraph 4 and the rules made by the Board in this regard and may, at any time, withdraw such recognition if, in his opinion, the provident fund violates any of those conditions.

(2) An order granting recognition shall take effect on such date specified by the approving authority as per any rules made or may be made by the Board in this behalf, such date not being later than the last day of the tax year in which the order is made.

(3) An order withdrawing recognition shall take effect from the date on which it is made.

(4) An order according recognition to a provident fund shall not, unless the approving authority otherwise directs, be affected by the fact that—

(a) the fund is subsequently amalgamated with another provident fund on the occurrence of an amalgamation of the undertakings in connection with which the two funds are maintained; or

(b) the fund subsequently absorbs the whole or a part of another provident fund belonging to an undertaking which is wholly or in part transferred to or merged in the undertaking of the employer maintaining the first-mentioned fund.

Conditions to be satisfied by recognised provident funds.

4. In order to receive and retain recognition, a provident fund, shall, subject to the provisions of paragraph 5, satisfy the following conditions and any other conditions as may be prescribed—

(a) all employees shall be employed in India, or employed by an employer whose principal place of business is in India;

(b) the contributions of an employee in any year shall be a fixed proportion of his salary for that year, deducted by the employer from each periodical payment of salary in that proportion and credited to the employee's individual account in the fund;

(c) ⁴⁴[***]

(d) the fund shall be vested in two or more trustees or the Official Trustee under a trust which shall not be revocable, except with the consent of all the beneficiaries;

(e) the fund shall consist only of--

(i) contributions as specified above, received by the trustees;

(ii) accumulations thereof;

(iii) interest credited in respect of such contributions and accumulations;

(iv) securities purchased therewith; and

(v) any capital gains arising from the transfer of capital assets of the fund;

⁴⁵[(f) the fund shall be a fund--

(i) of an establishment to which the provisions of section 1(3) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) apply; or

(ii) of an establishment notified by the Central Provident Fund Commissioner under section 1(4) of the said Act, and such establishment shall obtain exemption under section 17 of the said Act from the operation of all or any of the provisions of any

scheme as referred to in that section;]

(g) the employer, subject to clause (h), shall not be entitled to recover any sum from the fund, except when the employee—

(i) is dismissed for misconduct; or

(ii) voluntarily leaves his employment otherwise than due to ill-health or other unavoidable cause before the end of the term of service specified in the regulations of the fund;

(h) for the purposes of clause (g), the recovery made by the employer shall be limited to--

(i) the contributions made by him to the individual account of the employee;

(ii) interest credited in respect of such contributions as per the regulations of the fund; and

(iii) the accumulations thereof;

(i) the accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund;

(j) except as provided in clause (i) or as per conditions and restrictions prescribed, no portion of the balance to the credit of an employee shall be payable to him.

Relaxation of conditions.

5. (1) Irrespective of anything contained in paragraph 4(a), the approving authority may, if he thinks fit and subject to such conditions that he thinks proper to attach to such recognition, record recognition to a fund which is—

(a) maintained by an employer whose principal place of business is outside India; and

(b) the proportion of employees employed outside India does not exceed 10%.

(2) Irrespective of anything contained in paragraph 4(b), an employee who retains his employment--

(a) while serving in the armed forces of the Union; or

(b) when taken into or employed in the national service under any law for the time being in force, may, contribute to the fund during such service in the armed forces or employment in the national service, a sum not exceeding the amount he would have contributed had he continued to serve the employer, whether he received any salary or not from the employer.

(3) Irrespective of anything contained in paragraph 4(e) or (i),—

(a) at the request made in writing by the employee who ceases to be an employee of the employer maintaining the fund, the trustees of the fund may agree to retain the whole or any part of the accumulated balance to be drawn by him at any time on demand;

(b) when the accumulated balance due to such employee is retained in the fund as per clause (a), the fund may also include interest in respect of such accumulated balance; and

(c) the fund may also consist of any amount and interest thereof transferred from the employee's individual account in any recognised provident fund maintained by his former employer.

(4) ⁴⁶[***]

(5) Irrespective of anything contained in paragraph 4(j), in order to allow an employee to pay the amount of tax assessed on his total income under paragraph 11(4), such employee shall be allowed to withdraw from the balance amount to his credit in the recognised provident fund, a sum not exceeding the difference between such amount and the amount to which he would have been assessed if the transferred balance referred to in paragraph 11(2) had not been included in the total income.

⁴⁷[Employer's annual contributions, when deemed to be income received by employee.

6. The portion of the annual accretion in the tax year to the balance of an employee in a recognised provident fund consisting of interest credited on the balance to the credit of an employee in so far as it is allowed at a rate exceeding such rate as fixed by the Central Government by notification, shall be

deemed to have been received by the employee and included in his total income for that tax year and shall be liable to income-tax.]

Exemption for employee's contributions.

7. An employee participating in a recognised provident fund shall, in respect of his own contributions to his individual account in the fund in the tax year, be entitled to a deduction in the computation of his total income of an amount determined as per section 123.

Exclusion from total income of accumulated balance

8. (1) Subject to the provisions of sub-paragraph (2), the accumulated balance due and payable to an employee shall be excluded from the computation of his total income—

(a) if the employee has rendered continuous service with his employer for five years or more; or

(b) even if, the employee has not served continuously, the service was terminated due to--

(i) the employee's ill-health; or

(ii) by the contraction or closure of the employer's business; or

(iii) other cause beyond the control of the employee;

(c) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer; or

(d) the entire balance standing to the employee's credit is transferred to his account under a pension scheme referred to in section 124 and notified by the Central Government.

(2) Where the accumulated balance due and payable to an employee includes any amount transferred from another recognised provident fund or funds of a previous employer or employers, the continuous service period for the purposes of sub-paragraph (1)(a) or (b) shall include the period or periods served under the aforesaid previous employer or employers.

Tax on accumulated balance.

9. Where the accumulated balance due to an employee is included in his total income owing to the provisions of paragraph 8 not being applicable, then—

(a) the Assessing Officer shall calculate the total of the various sums of tax which would have been payable by the employee in respect of his total income for each of the years concerned if the fund had not been a recognised provident fund; and

(b) the amount by which such total exceeds the total of all sums paid by or on behalf of such employee by way of tax for such years shall be payable by the employee in addition to any other tax for which he may be liable for the tax year in which the accumulated balance due to him becomes payable.

Deduction at source of tax payable on accumulated balance.

10. In cases where paragraph 9 applies--

(a) the trustees of a recognised provident fund; or

(b) any person authorised by the regulations of the fund to make payment of accumulated balances due to employees, shall deduct from the accumulated balance at the time of payment, the amount payable under the rule and the provisions of Chapter XIX-B shall apply as if the accumulated balance were income chargeable under the head "Salaries".

Treatment of balance in newly recognised provident fund.

11. (1) Where recognition is accorded to a provident fund with existing balances, an account shall be made of the fund up to the day immediately preceding the day on which the recognition takes effect,—

(a) showing the balance to the credit of each employee on such day; and

(b) containing such further particulars as may be prescribed.

(2) The account shall also show in respect of balance to the credit of each employee—

(a) the amount thereof to be transferred to the employee's account in the recognised provident fund (herein referred to as transferred balance); and

(b) such "transferred balance" shall be shown as balance to his credit in the recognised provident fund on the date on which the recognition takes effect, and sub-paragraph (4) and paragraph 5(5) shall apply accordingly.

(3) Any part of the balance to the credit of each employee in the existing fund not transferred to the recognised fund shall be excluded from the recognised fund's account and shall be liable to income-tax as per the provisions of this Act, other than this Part.

(4) Subject to rules made by the Board in this behalf,—

(a) the Assessing Officer shall calculate the aggregate of all amounts in the transferred balance that would have been liable to income-tax if this Part had been in force since the fund's institution, without regard to any tax which may have been paid on any amount;

(b) the aggregate of amounts in a transferred balance, if any, shall be deemed to be income received by the employee in the tax year in which the recognition of the fund takes effect and shall be included in the employee's total income for that tax year;

(c) for the purposes of assessment, the remainder of the transferred balance shall be disregarded, but no other exemption or relief, by way of refund or otherwise, shall be granted in respect of any sum comprised in such transferred balance.

(5) In cases of serious accounting difficulty, the approving authority may, subject to rules, make a summary calculation of the aggregate as provided in sub-paragraph (4).

(6) Nothing in this paragraph shall affect the rights of the persons administering an unrecognised provident fund or dealing with it, or with the balance to the credit of any individual employee prior to recognition, in any manner permitted by law.

Accounts of recognised provident funds.

12. (1) The accounts of a recognised provident fund shall be maintained by the trustees of the fund in such form, for such period, and contain such particulars, as may be prescribed.

(2) The accounts shall be available to inspection by the income-tax authorities at all reasonable times, and the trustees shall provide the Assessing Officer with the abstracts of such accounts as may be prescribed.

Appeal.

13. (1) An employer objecting to an order of the approving authority not granting recognition or withdrawing recognition from a provident fund may appeal to the Board, within sixty days of such order.

(2) The appeal shall be in such form and verified in such manner, and subject to the payment of such fee as may be prescribed.

Treatment of fund transferred by employer to trustee.

14. (1) When an employer who maintains a provident fund, whether recognised or not, for the benefit of his employees and has not transferred the fund or portion of it, transfers such fund or portion to trustees in trust for the participating employees, the transferred amount shall be deemed to be of the nature of capital expenditure.

(2) When an employee receives the accumulated balance due to him from the fund, any portion of such balance representing the employee's share of the amount transferred to the trustees (without addition of interest and exclusive of employee's contributions and interest thereon) shall be deemed to be,—

(a) employer's expenditure under section 34;

(b) incurred in the tax year in which the accumulated balance due to the employee is paid, provided an arrangement for deduction of tax at source has been made from the amount of such share by the employer.

PART B

APPROVED SUPERANNUATION FUNDS AND GRATUITY FUNDS

Interpretation.

1. For the purposes of this Part, unless the context otherwise requires, "approving authority", "employer", "employee", "contribution" and "salary", in relation to superannuation funds and gratuity funds shall have, the meanings as assigned to those expressions in paragraph 2(a), (b), (c), (d) and (i) of Part A in relation to provident funds.

According approval to superannuation fund and its withdrawal.

2. (1) The approving authority may grant approval to any superannuation fund or its part, or any gratuity fund, as the case may be, which in his opinion satisfies the conditions prescribed in paragraph 3, and may withdraw such approval at any time, if, in his opinion, the circumstances cease to warrant such approval.

(2) The approving authority shall inform the trustees of the fund, in writing, the grant of approval with the date on which the approval is to take effect and the conditions subject to which such approval is granted, if any.

(3) The approving authority shall inform the trustees of the fund, in writing, any withdrawal of approval along with the reasons and the date on which the withdrawal is to take effect.

(4) The approving authority shall not refuse or withdraw any approval without giving the trustees a reasonable opportunity of being heard.

Conditions for approval.

3. In order to receive and retain approval, a superannuation fund or a gratuity fund, as the case may be, shall satisfy the following conditions, and any other conditions as may be prescribed:—

(a) the fund shall be established under an irrevocable trust in connection with a trade or an undertaking carried on in India, with at least 90% employees employed in India;

(b) the sole purpose of the fund shall be the provision of annuities or gratuity, as the case may be, for employees in the trade or undertaking--

(i) upon their retirement at or after a specified age;

(ii) upon incapacitation before retirement;

(iii) on termination of employment after a minimum period of service specified in the rules of the gratuity fund; or

(iv) for the widows, children or dependants of such employees on their death;

(c) the employer in the trade or undertaking shall contribute to the fund; and

(d) all annuities, pensions and other benefits, granted from the fund shall be payable only in India.

Application for approval.

4. (1) An application for approval of a superannuation fund or part of it, or any gratuity fund, as the case may be, shall be made in writing by the trustees to the Assessing Officer by whom the employer is assessable, and shall be accompanied by—

(a) a copy of the instrument establishing the fund and two copies of the rules thereof; and

(b) two copies of the accounts of the fund relating to such earlier year or years (not more than three years immediately preceding the year in which the said application is made) for which the accounts have been made up, if the fund has been in existence before the financial year in which the application for approval is made.

(2) In addition to the documents referred to in sub-paragraph (1), the approving authority may require such further information to be furnished as he thinks proper.

(3) If any alteration is made to the rules, constitution, objects or conditions of the fund after the date of the application for approval,--

(a) the trustees shall immediately inform such alterations to the Assessing Officer mentioned in sub-paragraph (1); and

(b) failure to inform such alterations may result in the approval given, if any, be deemed to be withdrawn from the date on which the alteration took effect, unless the approving authority orders otherwise.

Gratuity deemed to be salary.

5. If any gratuity is paid to an employee during his lifetime, the gratuity shall be treated as salary paid to the employee for the purposes of this Act.

Contributions of employee when deemed to be income of employer.

6. When contributions by an employer (including the interest, if any) are repaid to the employer, the amount so repaid shall be deemed for the purposes of income-tax to be the income of the employer of the tax year in which they are so repaid.

Deduction of tax on contributions paid to an employee.

7. (1) When any contributions made by an employer to an approved superannuation fund, including interest are paid to an employee during his lifetime under conditions other than those specified in Schedule II (Table: Sl. No. 8), tax on the amounts so paid shall be deducted at the average rate of tax applicable to the employee—

(a) during the previous three years; or

(b) during the period for which the employee was a member of the fund, if the period is less than three years.

(2) The trustees shall pay the tax so deducted to the Central Government within the time and manner, as may be prescribed.

Deduction from pay of and contributions on behalf of employee to be included in return.

8. When an employer deducts contributions from the emoluments of the employee or pays on his behalf any contributions to an approved superannuation fund, all such deductions or payments shall be included in the statement which is required under section 397(3)(b).

Appeal.

9. (1) An employer objecting to an order of the approving authority refusing to grant approval to a superannuation fund, or a gratuity fund, as the case may be, or withdrawing such approval may appeal to the Board within sixty days of such order.

(2) The appeal shall be in such form and verified in such manner and subject to the payment of such fee, as may be prescribed.

Liability of trustees on cessation of approval of superannuation fund.

10. If a fund or a part of a fund for any reason ceases to be an approved superannuation fund, the trustees of the fund shall nevertheless remain liable to tax on any sum paid on account of returned contributions (including interest on contributions, if any), in so far as the sum so paid is in respect of contributions made before the fund or part of the fund ceased to be an approved superannuation fund under the provisions of this Part.

Liabilities of trustees on cessation of approval of gratuity fund.

11. If a gratuity fund for any reason ceases to be an approved gratuity fund, the trustees shall nevertheless remain liable to tax on any gratuity paid to any employee.

Particulars to be furnished.

12. The trustees of an approved superannuation fund or an approved gratuity fund and any employer who contributes to such a fund shall furnish such returns, statement, particulars or information, as required by notice from the Assessing Officer within the specified period, not being less than twenty-one days from the date of the notice.

PART C

POWER TO MAKE RULES FOR PROVIDENT FUNDS, SUPERANNUATION FUNDS AND GRATUITY FUNDS

Power of Board to make rules for fund.

1. In addition to powers granted by Part A and Part B of this Schedule, the Board may make rules for a fund (provident fund or superannuation fund or gratuity fund) in respect of the following:—

(a) to provide for the statements and information to be submitted along with an application for approval or recognition for a fund;

(b) to provide for the returns, statements, particulars, or information which the Assessing Officer may require from the trustees of an approved superannuation fund or from the employer;

(c) to limit the ordinary annual and other contributions of an employer to the gratuity fund or an approved superannuation fund;

(d) ⁴⁸[***]

⁴⁹[(e) to regulate investment or deposit of the moneys of a recognised or an approved fund;]

(f) to provide for the assessment by way of penalty of any consideration received by an employee for an assignment of, or creation of a charge upon, his beneficial interest in a recognised or an approved fund;

(g) to determine the extent and manner of exemption from payment of tax on contributions and interest credited to the individual account of the employee in a provident fund from which recognition has been withdrawn;

(h) to determine the extent and manner of exemption from payment of tax on any payment made from a superannuation fund from which approval has been withdrawn;

(i) to provide for the withdrawal of the approval of a superannuation fund or gratuity fund, which ceases to satisfy the requirements of this Part or the rules made thereunder; and

(j) to carry out any other the purpose of this Part and to secure such further control over the recognition or approval of the funds and the administration of such funds as it may deem requisite.

2. All rules made under this Part shall be subject to section 534.

1. Aluminium ores. 2. Apatite and phosphatic ores. 3. Beryl. 4. Chrome ore. 5. Coal and lignite. 6. Columbite, Samarskite and other minerals of the "rare earths" group. 7. Copper. 8. Gold. 9. Gypsum. 10. Iron ore. 11. Lead. 12. Manganese ore. 13. Molybdenum. 14. Nickel ores. 15. Platinum and other precious metals and their ores. 16. Pitchblende and other uranium ores. 17. Precious stones. 18. Rutile. 19. Silver. 20. Sulphur and its ores. 21. Tin. 22. Tungsten ores. 23. Uraniferous allanite, monazite and other thorium minerals. 24. Uranium bearing tailings left over from ores after extraction of copper and gold, ilmenite and other titanium ores. 25. Vanadium ores. 26. Zinc. 27. Zircon.

⁵⁰[28. Beryllium bearing minerals. 29. Glauconite. 30. Graphite. 31. Indium bearing minerals. 32. Lithium bearing minerals. 33. Niobium bearing minerals. 34. Potash. 35. Rhenium bearing minerals.

36. Tantalum bearing minerals.]

PART B

GROUPS OF ASSOCIATED MINERALS 1. Apatite, Beryl, Cassiterite, Columbite, Emerald, Felspar, Lepidolite, Mica, Pitchblende, Quartz, Samarskite, Scheelite, Topaz, Tantalite, Tourmaline. 2. Iron, Manganese, Titanium, Vanadium and Nickel minerals. 3. Lead, Zinc, Copper, Cadmium, Arsenic, Antimony, Bismuth, Cobalt, Nickel, Molybdenum, and Uranium minerals, and Gold and Silver, Arsenopyrite, Chalcopyrite, Pyrite, Pyrrhotite and Pentlandite. 4. Chromium, Osmiridium, Platinum and Nickel minerals. 5. Kyanite, Sillimanite, Corundum, Dumortierite and Topaz. 6. Gold, Silver, Tellurium, Selenium and Pyrite. 7. Barytes, Fluorite, Chalcocite, Selenium, and minerals of Zinc, Lead and Silver. 8. Tin and Tungsten minerals. 9. Limestone, Dolomite and Magnesite. 10. Ilmenite, Monazite, Zircon, Rutile, Garnet and Sillimanite. 11. Sulphides of Copper and Iron. 12. Coal, Fire clay and Shale. 13. Magnetite and Apatite. 14. Magnesite and Chromite. 15. Talc (Soapstone and Steatite) and Dolomite. 16. Bauxite, Laterite, Aluminous Clays, Lithomarge, Titanium, Vanadium, Gallium and Columbium minerals.

1. Beer, wine and other alcoholic spirits. 2. Tobacco and tobacco preparations, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff. 3. Cosmetics and toilet preparations. 4. Tooth paste, dental cream, tooth powder and soap. 5. Aerated waters in the manufacture of which blended flavouring concentrates (including synthetic essence) in any form are used. 6. Confectionery and chocolates. 7. Gramophones, including record players, and gramophone records. 8. Projectors. 9. Photographic apparatus and goods. 10. Office machines and apparatus such as typewriters, calculating machines, cash registering machines, cheque writing machines, intercom machines and teleprinters including all machines and apparatus used in offices, shops, factories, workshops, educational institutions, railway stations, hotels and restaurants for doing office work and for data processing including calculating machines and calculating devices not being computers. 11. Steel furniture, whether made partly or wholly of steel. 12. Safes, strong boxes, cash and deed boxes and strong room doors. 13. Latex foam sponge and polyurethane foam. 14. Crown corks, or other fittings of cork, rubber, polyethylene or any other material. 15. Pilfer-proof caps for packaging or other fittings of cork, rubber, polyethylene or any other material.

1. If a person is engaged in life insurance business during the tax year, the profits and gains of such business shall be computed separately from profits and gains of any other business.

Computation of profits of life insurance business.

2. (1) The profits and gains life insurance business shall be the annual average of the surplus after adjusting the surplus or deficit disclosed by the actuarial valuation made as per the Insurance Act, 1938 (4 of 1938) for the last inter-valuation period ending before the commencement of tax year, so as to exclude from it any surplus or deficit from any earlier inter-valuation period.

(2) Any expenditure which is inadmissible under section 34 in computing the profits and gains of a business, shall be added to such profits and gains of life insurance business.

Adjustment of tax paid by deduction at source.

3. When an assessment of the life insurance business profits is made based on the annual average of a surplus disclosed by a valuation for an inter-valuation period exceeding twelve months, then, in computing the income-tax, payable for that year credit shall--

(a) not be given as per section 390 for the income-tax paid in the preceding tax year;

(b) be given for the annual average of the income-tax paid by deduction at source from interest on securities or otherwise during such period.

B.—Other insurance business

Computation of profits and gains of other insurance business.

4. (1) The profits and gains of any insurance business other than life insurance shall be the profit before tax and appropriations as disclosed in the profit and loss account prepared as per the Insurance Act, 1938 (4 of 1938) or the rules made thereunder or the Insurance Regulatory and Development Authority Act, 1999 (4 of 1999) or the regulations made subject to the following adjustments:--

(a) subject to the other provision of ⁵¹[this paragraph], any expenditure or allowance including any amount debited to profit and loss account either by way of a provision for any tax, dividend, reserve, or any other provision as may be prescribed, which is inadmissible under sections 28 to 54 shall be added back;

(b) any gain or loss from realisation of investments shall be added or deducted, as the case may be, if not already credited or debited to the profit and loss account;

(c) any provision for diminution in investment value debited to the profit and loss account, shall be added back; and

(d) such amount carried over to a reserve for unexpired risks as may be prescribed shall be allowed as a deduction.

(2) The amount payable under section 37, which is added under sub-paragraph (1)(a) shall be allowed as deduction in the tax year in which it is actually paid.

⁵²[(3) The amount not deductible under sub-clause (i) or (ii) of section 35(b), which is added under sub-paragraph (1)(a), shall be allowed subsequently as a

deduction in a tax year in accordance with the provisions of the said sub-clause, as the case may be.]

C.—Other provisions

Profits and gains of non-resident person.

5. (1) The profits and gains of a person non-resident in India who is engaged in the insurance business through its branches in India may, in the absence of more reliable data, be deemed to be that proportion of his global income which corresponds to the proportion which his premium income derived from India bears to his total premium income.

(2) In this paragraph, the global income in relation to life insurance business of a person not resident in India shall be computed as per this Act for computing the profits and gains of life Insurance business carried on in India.

Interpretation.

6. (1) For the purposes of this schedule,--

(a) "investments" include securities, stocks and shares;

(b) "life insurance business" means life insurance business as defined in section 2(11) of the Insurance Act, 1938 (4 of 1938).

(2) References to the Insurance Act, 1938 (4 of 1938) in this Schedule regarding the Life Insurance Corporation of India shall be treated as references to that Act or section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956).

1. For any tax year, the following amounts shall qualify as deduction for the purpose of section 123—

(a) premium paid for a life insurance policy—

(i) in the case of an individual, on life of such individual, spouse of the individual and any child of the individual;

(ii) in the case of a Hindu undivided family, on life of any member of the Hindu undivided family, subject to paragraph 2;

(b) sum paid under a deferred annuity contract other than the annuity plan referred to in clause (l) on life of the individual, spouse of the individual and any child of the individual, and such contract does not contain an option to receive cash payment in lieu of the annuity;

(c) sum deducted from salary payable by or on behalf of the Government to any individual for securing deferred annuity or making provision for his spouse or children, to the extent of 20% of salary;

(d) contribution by an individual to any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies;

(e) contribution to an account with any provident fund, set up and notified by the Central Government, in the name of,—

(i) in the case of an individual, such individual, spouse of the individual and any child of the individual;

(ii) in the case of a Hindu undivided family, any member thereof;

(f) contribution by an employee to a recognised provident fund;

(g) contribution by an employee to an approved superannuation fund;

(h) subscription to any security or deposit scheme notified by the Central Government in the name of an individual or any girl child of that individual, or any girl child for whom such person is the legal guardian, if the scheme so specifies;

(i) subscription to savings certificate as mentioned in section 3(k) of the Government Savings Banks Act, 1873 (5 of 1873), as may be notified by the Central Government;

(j) contribution for participation in Unit-linked Insurance Plan, 1971 specified in Schedule II of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002),—

(i) in the case of an individual, in the name of such individual, spouse of the individual and any child of the individual;

(ii) in the case of a Hindu undivided family, in the name of any member thereof;

(k) contribution for participation in unit-linked insurance plan of Life Insurance Corporation Mutual Fund, referred to in Schedule VII (Table: Sl. No. 20 or 21), as may be notified by the Central Government,—

(i) in the case of an individual, in the name of such individual, spouse of the individual and any child of the individual;

(ii) in the case of a Hindu undivided family, in the name of any member thereof;

(l) sum paid to effect or to keep in force a contract for annuity plan of the Life Insurance Corporation or any other insurer notified by the Central Government;

(m) subscription to any units of any Mutual Fund referred to in serial number 20 or 21 of the Table in Schedule VII or from the Administrator or the specified company under any plan formulated in accordance with such scheme notified by the Central Government;

(n) contribution by an individual to any pension fund set up by—

(i) any Mutual Fund referred to in Schedule VII (Table: Sl. No. 20 or 21) ; or

(ii) the Administrator; or

(iii) the specified company, as may be notified by the Central Government;

(o) subscription to a deposit scheme or contribution to a pension fund, set up by the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987), as may be notified by the Central Government;

(p) subscription to any deposit schemes of—

(i) a public sector company engaged in providing long-term finance for construction or purchase of houses in India for residential purposes; or

(ii) an authority constituted in India by any law, 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 may be notified by the Central Government;

(q) tuition fees (excluding any development fees or donation or payment of similar nature) paid by an individual to any University, college, school or other educational institution situated in India (at the time of admission or thereafter), for full time education of any two children of such individual;

(r) payment made for 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 own residence of the assessee, have been chargeable to tax under that head), subject to satisfaction of conditions laid down in paragraph 3;

(s) term deposit for a fixed period of not less than five years with a scheduled bank, and which is as per such scheme framed and notified by the Central Government;

(t) subscription to bonds issued by the National Bank for Agriculture and Rural Development, as may be notified by the Central Government;

(u) deposit in an account under the Senior Citizen Savings Scheme Rules, 2004;

(v) five years term deposit in an account under the Post Office Time Deposit Rules, 1981;

(w) contribution by an employee of the Central Government to an additional account referred to in section 20(3) of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013) of the pension scheme notified by the Central Government, as referred to in section 124—

(a) for a fixed period of not less than three years; and

(b) which is as per the scheme as may be notified by the Central Government for the purposes of this clause;

(x) contribution made from income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the fund referred to in Schedule VII (Table: Sl. No. 3);

(y) contribution made by an individual to a pension scheme notified by the Central Government, to the extent of—

(i) 10% of salary, including dearness allowance, if the terms of employment so provide, but excluding all other allowances and perquisites, during the tax year in the case of an employee of the Central Government or any other employer; or

(ii) 20% of gross total income during the tax year in the case of any other individual;

(z) subscription to—

(i) 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 form;

(ii) any units of any mutual fund referred to in Schedule VII (Table: Sl. No. 20 or 21) and approved by the Board on an application made by such mutual fund in the prescribed form and if the amount of subscription to such units is subscribed only in the eligible issue of capital of any company.

Payment on insurance policy.

2. (1) The deductions 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, —

(a) as is up to 20% of the actual capital sum assured, in respect of a policy issued on or before the 31st March, 2012;

(b) as is up to 10% of the actual capital sum assured, in respect of a policy issued on or after the 1st April, 2012;

(c) as is up to 15% of the actual capital sum assured, if the policy is issued on or after the 1st April, 2013 and where such policy covers the life of,—

(i) a person with a disability or severe disability as referred to in section 154; or

(ii) a person suffering from a disease or ailment specified in the rules made under section 128.

(2) In this paragraph, "actual capital sum assured" 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—

(a) the value of any premiums agreed to be returned; or

(b) 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.

Payments made for purchase or construction of residential house property.

3. The deduction in respect of amount spent for purchase or construction of a residential house property as provided in paragraph 1(r) shall—

(a) include payments that are made towards or by way of—

(i) 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

(ii) 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

(iii) repayment of the amount borrowed by the assessee from—

(A) the Central Government or any State Government; or

(B) any bank, including a co-operative bank; or

(C) the Life Insurance Corporation; or

(D) the National Housing Bank; or

(E) 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 section 32(e); or

(F) 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

(G) the employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central Act or State Act; or

(H) the employer of the assessee 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

(iv) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee;

(b) not include any payment towards or by way of—

(i) 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

(ii) 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 it, 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

(iii) any expenditure in respect of which deduction is allowable under section 22.

Disallowance of and taxation of deduction already allowed.

4. The deductions in the nature of payments specified in column B of the Table below shall not be allowable in the tax year in which the conditions specified in column C of the said Table are fulfilled, and the aggregate amount of the deductions allowed thus far in the preceding tax year or tax years shall be deemed to be the income of the assessee and liable to tax in such tax year:

Taxation of receipts where deduction already allowed

5. Where deductions in the nature of payments specified in column B of the Table below have been allowed, and the conditions specified in column C of the said Table are fulfilled in any tax year, the amounts received shall be taxed in such tax year in the manner as provided in column D of the said Table:

Interpretation.

6. For the purposes of this Schedule,—

(a) "Administrator" means the Administrator as referred to in section 2(a) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(b) "contribution" to any fund shall not include any sums in repayment of loan;

(c) "insurance" shall include,—

(i) 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 irrespective 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;

(ii) 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;

(d) "Life Insurance Corporation" means the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956);

(e) "public company" shall have the same meaning as assigned to it in section 2(71) of the Companies Act, 2013 (18 of 2013);

(f) "security" means a Government security as defined in section 2(f) of the Government Securities Act, 2006 (38 of 2006);

(g) "specified company" means a company as referred to in section 2(h) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002);

(h) "transfer" shall be deemed to include also the transactions referred to in section 269UA(f) of the Income-tax Act, 1961 (43 of 1961);

(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 section 80-IA(4) of the Income-tax Act, 1961 (43 of 1961);

(j) "public financial institution" shall have the same meaning as assigned to it in section 2(72) of the Companies Act, 2013 (18 of 2013).

1. The modes of investing or depositing the money referred to in section 350 shall be the following:—

(1) investment in savings certificates as defined in section 2(c) 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;

(2) deposit in any account with the Post Office Savings Bank;

(3) 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);

(4) investment in units of the Unit Trust of India;

(5) investment in any security for money created and issued by the Central Government or a State Government;

(6) 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;

(7) investment or deposit in any public sector company subject to the condition 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 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;

(8) 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 which is eligible for deduction under section 32(e);

(9) 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 which is eligible for deduction under section 32(e);

(10) 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;

(11) investment in immovable property;

(12) deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);

(13) investment in the units issued under any scheme of the mutual fund referred to in Schedule VII (Table: Sl. No. 20) or (Table: Sl. No. 21);

(14) any transfer of deposits to the Public Account of India;

(15) deposits made with an 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;

(16) investment by way of acquiring equity shares of a depository as defined in section 2(1)(e) of the Depositories Act, 1996 (22 of 1996);

(17) investment made by a recognised stock exchange referred to in section 2(f) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) (herein referred to as investor) in the equity share capital of a company (herein referred to as investee)—

(a) which is engaged in dealing with securities or mainly associated with the securities market;

(b) whose main object is to acquire the membership of another recognised stock exchange for the sole purpose of facilitating the members of the investor to trade on the said stock exchange through the investee as per the directions or guidelines issued under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by the Securities and Exchange Board of India established under section 3 of that Act; and

(c) in which at least 51% of equity shares are held by the investor and the balance equity shares are held by members of such investor;

(18) investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), in the equity share capital or bonds or debentures of a company—

(a) which is engaged in operations of retail payments system or digital payments settlement or similar activities in India and abroad and is approved by the Reserve Bank of India for this purpose; and

(b) in which at least 51% of equity shares are held by National Payments Corporation of India;

(19) investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007 (51 of 2007), in the equity share capital or bonds or debentures of Open Network for Digital Commerce Ltd., being a company incorporated under section 7(2) read with section 8(1) of the Companies Act, 2013 (18 of 2013), for participating in network based open protocol models which enable digital commerce and interoperable digital payments in India;

(20) investment by way of acquiring equity shares of an incubatee by an incubator;

(21) investment by way of acquiring shares of National Skill Development Corporation;

(22) investment in debt instruments issued by any infrastructure Finance Company registered with the Reserve Bank of India;

(23) investment in "Stock Certificate" as defined in clause (c) of paragraph 2 of the Sovereign Gold Bonds Scheme, 2015, published in the Official Gazette vide notification number G.S.R. 827(E), dated the 30th October, 2015;

(24) investment by way of Acquiring Units of Powergrid Infrastructure Investment Trust;

(25) shares in a public sector company;

(26) 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 June, 1973;

(27) 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 June, 1998, where it was approved at that time under the provisions of section 10(23C) of the Income-tax Act, 1961 (43 of 1961);

(28) any accretion to the shares, forming part of the corpus mentioned in sub-paragraph (26) or (27), by way of bonus shares allotted to the trust or institution;

(29) any assets (being debentures issued by, or on behalf of, any company or corporation) acquired by the trust or institution before the 1st March, 1983;

(30) voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification specify;

(31) any asset, not being an investment or deposit in any of the forms or modes specified in sub-paragraphs (1) to (30), where such asset is not so held up to one year from the end of the tax year in which such asset is acquired;

(32) any funds representing the profits and gains of business, being profits and gains of any tax year relevant to the tax year commencing on the 1st April, 1984 or any subsequent tax year so, however, where it has any other income in addition to profits and gains of business, these provisions shall not apply unless it maintains separate books of account in respect of such business.

Interpretation.

2. For the purposes of this Schedule,—

(a) "long-term finance" 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;

(b) "public company" shall have the same meaning as assigned to it in section 2(71) of the Companies Act, 2013 (18 of 2013);

(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;

(d) "immovable property" does not include any machinery 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;

(e) "incubatee" shall mean such incubatee as may be notified by the Government of India in the Ministry of Science and Technology;

(f) "incubator" shall mean such Technology Business Incubator or Science and Technology Entrepreneurship Park as notified by the Government of India in the Ministry of Science and Technology.